Pat Doyle, Esther Miller and Jim Sears

Mathematica Policy Research, Inc.

May 10, 1990

This report was prepared under contract #HHS-88-0047 between the U.S. Department of Health and Human Services (HHS) Office of Social Services Policy (now DALTCP) and Mathematica Policy Research, Inc. For additional information about this subject, you can visit the DALTCP home page at http://aspe.hhs.gov/_/office_specific/daltcp.cfm or contact the office at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, S.W., Washington, D.C. 20201. The e-mail address is: webmaster.DALTCP@hhs.gov. The DALTCP Project Officer was Michele Adler.

The opinions and views expressed in this report are those of the authors. They do not necessarily reflect the views of the Department of Health and Human Services, the contractor or any other funding organization.

The authors wish to thank Harold Beebout and Alberto Martini for their careful technical review, Tom Good and Susan Allin for their editorial assistance, Robert Cohen for the production of the analysis file and Sheana Thomas, Patrice Turner and Chiquita Payne for the production of this document.

This report relies on data from the Survey of Income and Program Participation (SIPP) to explore the extent to which persons with disabilities participate in federally subsidized cash and in-kind programs and the adequacy of total benefits from the combination of programs in alleviating poverty among this group. The report establishes the existence of disabilities according to three broad definitions: limitations in functioning (defined differently for adults and children), limitations in work, and the receipt of disability benefits. A six-level scale of limitations in functioning and a four-level scale of limitations in work are used to account for a broad range of limitations--from the most severely disabled persons to those who report no limitations. In addition, we use the term 'substantial functional limitations' to denote persons whose level of limitation in functioning is more severe than experiencing difficulty with just one function.

This study is part of a series of four reports prepared for the Department of Health and Human Services to other information on the population of persons with disabilities. Other reports in the series include the following:

A profile of persons with disabilities that provides the motivation for the different definitions and classifications of disability used in this study and which details both the prevalence of disabilities and the characteristics of the population with and without disabilities

A profile of the rules and benefit structures of the federal programs which serve the disabled

A profile of persons with disabilities who are in the labor market

The program participation patterns of the population of disabled persons and the adequacy of federal assistance in alleviating poverty among this group are summarized below.

FINDINGS

Programs designed to provide financial assistance to the disabled working-age population (Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), and Medic-are) are well targeted, in that:

Two-thirds or more of participants have substantial functional limitations or are prevented from working.

The likelihood of participation increases with the presence and severity of a limitation in functioning or a limitation in work.

Furthermore, while the Aid to Families with Dependent Children (AFDC), Food Stamp, and Medicaid programs are not targeted specifically to the disabled, a significant proportion of working-age program participants report substantial functional limitations. In addition, nonelderly individuals with disabilities are more likely to participate in the AFDC, Food Stamp, Social Security (other than SSDI), and smaller programs than is the total population of nonelderly persons.

Although not targeted to the disabled elderly population, most programs which provide benefits conditional on reaching age 65 serve a substantial portion of those with disabilities. Three-fourths of the participants in need-tested programs targeted to the low-income elderly population and slightly less than half of the participants in Social Security and Medicare have substantial functional limitations. While it is true that most elderly individuals are covered under the Social Security program and participation does not appear to be influenced by the severity of the limitation in functioning, participation rates in the other programs are affected by disability status. Participation in the SSI program increases with the severity of the limitation in functioning, and participation in federal assistance programs other than Social Security is higher among persons with substantial functional limitations than among those without.

Federal assistance programs in combination are more successful at reaching most of the low-income population with disabilities than at reaching the low-income population in general. However, a significant portion of the nonelderly low-income population with disabilities receive no assistance from the federal government--one-fourth of low-income working-age adults with substantial functional limitations, 16 percent of low-income working-age adults who are prevented from working, and one-fifth of low-income children with disabilities.

A substantial portion of persons with disabilities have health insurance, due in large part to the link between public health insurance and the receipt of federal assistance. Nonetheless, nearly one-fifth of the low-income nonelderly population lack insurance coverage from both public and private sources. The rate and nature of health insurance coverage vary by participation in federal assistance programs, disability status, and age.

The proportion of disabled individuals who participate in the SSI program appears to be low relative to the number who are apparently eligible:

The overall participation rate for eligible working-age adults is estimated to be 38 percent, and the overall rate among eligible elderly individuals is estimated to be 50 percent.

Participation rates among the working-age population do not increase with the severity of the limitation in functioning, while participation rates among the elderly do.

Income support programs combined with food stamps are successful at moving many persons with disabilities out of poverty. However, a substantial portion of nonelderly disabled individuals and a small but significant portion of elderly disabled individuals remain poor even after their receipt of food stamp benefits is taken into account:

Among the working-age adult population, Social Security benefits are very effective at reducing poverty, and are more effective for persons with disabilities than the total population. Cash assistance programs combined with food stamps are successful at increasing the economic status of persons in very poor households (defined as households whose pre-transfer household income is below half the poverty line). Nonetheless, one-third of very poor persons with disabilities and one-fourth of the total of the total population of the very poor are still in poverty even after the receipt of these benefits.

Social Security benefits are very successful at alleviating poverty among the elderly population. However, proportionately more disabled elderly persons remain in poverty after the receipt of federal cash assistance and food stamps than is true of the total population of elderly persons.

Small sample sizes preclude drawing specific statements about the impact of federal assistance programs on the poverty status of disabled children. However, over four-fifths; of children whose pre-transfer household income is below half the poverty line and almost one-third of children in other pre-transfer poor households remain poor after federal cash assistance and food stamps are taken into account.

This report provides a profile of the program participation patterns of the disabled population in the United States. It is one of a series of reports on the characteristics of this population group based on data from the 1984 Panel of the Survey of Income and Program Participation (SIPP), a nationally representative, ongoing survey of U.S. households. SIPP data include detailed information on sociodemographic and economic characteristics, such as income, assets, earnings and work history, welfare participation, family structure, and health insurance coverage, in addition to information necessary to define disability in three standard ways (the presence of functional limitations, the presence of work limitations, and the receipt of benefits from disability programs).

Persons with disabilities can potentially receive assistance from a myriad of federal assistance programs, some of which are targeted toward the disabled population and some of which are targeted toward other groups. These programs interact in many instances, some providing complementary coverage (such as Social Security and Medicare), and others serving to enhance the benefits of another program, such as Supplemental Security Income (SSI) benefits to low-income disabled individuals who receive small amounts of Social Security benefits. Furthermore, no single concept of disability is appropriate for all concerns and policy issues.

SIPP data allow us to examine the program participation patterns of the disabled population in most of the major assistance programs subsidized or sponsored by the federal government, both singly and in combination. They also allow us both to consider how these participation patterns change as the definition of disability is altered and to compare participation rates among the disabled population and the total civilian noninstitutionalized population in the United States. Finally, SIPP data permit us to analyze the economic well-being of the disabled population and how that economic measure is affected by the receipt of assistance from the federal government.

A. OVERVIEW OF THE REPORT

This report provides an analysis of the participation patterns of the disabled population in 14 assistance programs which provide cash, nutritional or housing assistance. The reference period in April 1984. As explained more fully in Chapter II, our definitions of disability encompass several degrees of limitations in functioning (for example, the need for assistance with or difficulties in standard basic self-care tasks and independent living activities) and several degrees of limitations in working (for example, prevented from working and limited in the amount and type of work that can be performed); moreover, we construct two summary disability classifications: substantial functional limitations (this limitation in functioning is more severe than experiencing difficulty with just one function) and prevented from working.

In Chapter III we first examine the characteristics of participants in each program in terms of their limitations in functioning and work limitations. Chapter IV provides a profile of the participation patterns of persons by the severity of their functional and work limitations. For persons with substantial functional limitations and for persons unable to work, we also present a profile of their combined benefits package, taking into account the interaction among programs. Chapter V examines the interaction among these federal assistance programs and health insurance coverage from both public and private sources. Since SSI is a need-tested program targeted toward elderly and disabled persons, we consider in Chapter VI the rates of participation in the SSI program conditional on eligibility criteria. The analysis concludes in Chapter VII with a study of the impact of federal cash assistance programs and food stamps on the poverty status of individuals with substantial functional limitations, and compares that impact with the impact of these programs on the poverty status of the total population.

B. OVERVIEW OF THE OVERALL PROJECT

This report is one component of a larger project initiated in response to the growing demand for information pertaining to persons with disabilities. The purpose of the project is to respond to the mandate of the Department of Health and Human Services to provide profiles of four policy-relevant dimensions of disabilities:

The number and characteristics of persons with disabilities

Their participation in federal programs targeted toward persons with disabilities

The structure and interaction of these disability programs

The extent to which persons with disabilities participate in gainful employment

This report focuses on the second of these issues. In addition, the project has generated three additional reports that explore these other issues in greater depth. The following provide greater detail on the topics of those reports:

A detailed profile of persons with disabilities according to three major population groups--children, working-age adults, and elderly--broken down by the prevalence of disability among and the characteristics of the population with and without disabilities, according to demographic characteristics, economic characteristics, health status, and health insurance coverage (Mathematica Policy Research, 1989)

A profile of the rules, benefits, and structure of the federal programs that serve persons with disabilities (SSDI, SSI, Medicare, and Medicaid) and the smaller programs for persons with disabilities (including Developmental Disabilities and Vocational Rehabilitation) (Burwell, Preston, and Bailey, 1989).

A profile of the labor-force participation patterns of persons with disabilities relative to those without disabilities, focusing on a comparison of the differences between disabled persons who work and those who do not, along such dimensions as types of employment federal program participation, income, family structure, work experience, and reasons for and degrees of disability (Martini, 1990).

This chapter summarizes how the SIPP data were used to describe the receipt of federal assistance among the disabled and nondisabled population, inclusive of programs targeted specifically toward disabled persons and programs that are not. SIPP is a particularly rich source of data on disability. First, disability measures are available for all three age groups. Second, information was gathered on many aspects of disability: sensory impairments, the ability to perform certain activities (such as walking upstairs), the ability to work, and the receipt of federal program benefits based on the presence of a disabling condition. Finally, SIPP contains a wealth of information on economic status, work history, educational attainment participation in federal programs, and demographic characteristics, thus generating a more comprehensive picture of the disabled population than has been possible from other surveys.

We first provide a brief overview of the survey, followed by the manner in which disability is determined. We then describe the federal programs being studied and the quality of SIPP based estimates of participation in these programs. The chapter concludes with a statement of statistical reliability.

A. SURVEY OF INCOME AND PROGRAM PARTICIPATION

SIPP is a nationally representative longitudinal survey of the civilian noninstitutionalized population in the United States. This survey has been administered by the U.S. Bureau of the Census since 1984; replacement panels (or samples) of respondents are added each year. In each round (or wave) of interviewing, a core set of questions collect information on each of the four months prior to the interview date. These core questions yield detailed information on monthly program participation, demographic characteristics, household composition, and income. In most waves, the monthly core questions are supplemented with questions on topical issues that vary from interview to interview. Because the interviews are staggered, the reference period covered in any given wave is not the same for all sample members. However, all waves contain one month in which the information that is collected overlaps, and which thus provides a common reference point. The 1984 Panel contains information on persons residing in approximately 20,000 addresses (dwelling units); each person 15 years of age and older in the household is interviewed individually, and information on the status of younger children in the household (e.g., information on their health) is gathered from their parents.

Our profiles of the patterns of program participation by persons with disabilities among the civilian noninstitutionalized population are based on data from the first (or 1984) Panel and focus on the data from Wave 3, the wave that contained topical questions on health and disability.1 Our estimates of per-sons with disabilities reflect the population in April 1984, the calendar month common to all sample members interviewed in Wave 3.

Data from Wave 3 of the 198.4 Panel were supplemented with information from Waves 1, 2 and 4 and from the Medicare Beneficiary Index developed by the Social Security Administration (Vaughan, 1989). It was necessary to integrate data from other waves and from the Social Security Administration because Wave 3 did not contain sufficient information to determine the disability status of recipients of Social Security and Veterans' benefits.

SIPP collects three basic types of information on disabilities: (1) limitations in functioning; (2) employment limitations; and (3) the receipt of government disability benefits. However, not all types of information are collected on all persons in the sample.2 Information on limitations in functioning--specifically self-care activities and sensory and physical limitations--are collected for all persons in the sample age 16 and older. More limited information on limitations in functioning is asked of parents or guardians for their children age 17 or younger in the household. Information on employment limitations or work disability is collected only for persons between the ages of 16 and 72. Finally, a determination that cash benefits are received for reasons of disability can be made only for persons ages 18 to 64.

Mathematica Policy Research (1989) provides a detailed discussion of the information provided in SIPP and how that information was used to construct the four measures of disability used in this analysis. The four measures of disability are summarized in the next section.

B. DISABILITY MEASURES DEFINED ON THE BASIS OF INFORMATION FROM SIPP

As we have seen, SIPP provides substantial information on three aspects of disability. In this section, we review the four measures of disability that we have been able to construct using SIPP data: limitations in functioning (defined differently for adults and children), limitations in employment and the receipt of disability benefits.

1. Limitations in Functioning in Adults

Limitation in functioning is the most inclusive definition of disability, encompassing disabilities that both preclude certain tasks and make tasks more difficult than would normally be expected. An important issue that must be addressed in defining disability as a limitation in functioning is where the line is to be drawn between various types of conditions that cause difficulties and those that can be deemed actual disabilities. Many analyses rely on a fairly broad definition, and count as a disability the presence of an impairment--that is, any emotional, physical, or mental loss or abnormality. This report uses a six-level scale in order to account for a broad range of limitations in functioning (from the most severely disabled to persons reporting no limitations).

Together, the six levels are mutually exclusive. Everyone in the population age 15 and older, disabled and nondisabled, is included. The six levels are as follows:

Level I: Need for assistance with ADLs. The need for help from another person to perform such basic activities of daily life as dressing, eating, or personal hygiene indicates severe disability.

Level II: Need for assistance with IADLs, but not with ADLs. The need for assistance in the IADL tasks of doing light housework, preparing meals, or taking a walk indicates a substantial limitation. We classified persons who report a need for assistance with IADLs but not ADLs in the less severely disabled group.

Level III: Inability in one or more sensory/physical functions, but no need for assistance. We classified individuals in Level III, the moderately disabled group, if they reported no need for assistance with ADLs or IADLs, and either were unable to perform one or more of the sensory/physical functions (e.g., seeing, hearing, lifting 10 pounds, walking three city blocks, or climbing a flight of stairs) or had difficulty with getting into or out of bed and getting around inside the house.3

Level IV: Difficulty with two or more sensory/physical functions, but no inabilities or need for assistance. We classified individuals in the limited disability group if they reported a difficulty with two or more functions but no inabilities, and no need for assistance.

Level V: Difficulty with only one sensory/physical function.

Level VI: No limitations in functioning. The numbers and proportion of persons who do not report limitations and are thus placed in Level VI provides a context from which the prevalence of various levels of limitation in functioning can be viewed.

In developing a profile of the program participation patterns of persons who have limitations in functioning, we found it useful to aggregate the first four of these six levels. We have used the term substantial functional limitation to denote persons whose level of limitation is at least as great as those persons with difficulties in two or more functions. As can be seen in the Tables in Mathematica Policy Research (1989), persons with substantial functional limitations tend to differ significantly from persons with only one difficulty (Level V) or with no limitation in functioning (Level VI) with respect to age, educational attainment, income, employment and health status.

2. Limitations in Functioning in Children

The questions in SIPP on the limitations in functioning of children focus on whether or not a child younger than age 18 has a long-lasting condition that limits his or her engaging in daily activities--physical activities (such as walking, running, or playing) or learning activities (being able to perform regular school work). We define as disabled those children who have either or both of the following limitations:4

Physically limited. This category includes children reported to have a long-lasting physical limitation that affects their ability to walk, run, or play.

Mentally or emotionally disturbed. This category includes children reported to have a long-lasting mental or emotional limitation that limits their ability to learn or to perform regular school work.

3. Employment Disability

Using SIPP data, we also classified persons as disabled or nondisabled according to their reported limitations in work activities. We divided the individuals in the sample into four levels of limitations in working:

Level I: Prevented from working

Level II: Limited in the amount and type of work that can be performed, yet still able to work part-time, occasionally, or irregularly

Level III: Limited in the amount or type of work, yet still able to work full-time

Level IV: Not limited in the amount or type of work

This classification scheme is similar to the schemes used by other researchers to assess employment limitations and disability.5 However, it should be noted that persons who reported any work during the four months preceding the interview were not asked the question about being prevented from working. Thus, persons who were prevented from working at the time of the interview, but who had worked even a little in the recent past (such as persons who had just recently been disabled or who had made a recent unsuccessful attempt to hold a job) would be classified as limited in working rather than prevented from working. Similarly, this grouping may classify persons who worked in sheltered workshops or other supportive-employment programs as limited rather than prevented from working, even if those persons required substantial subsidies, supports, or other services in order to work. This question format also means that, by definition, none of the persons we classified as being prevented from working will have reported any earnings over the last four months.

4. Receipt of Disability Benefits

The analysis of program participation patterns presented in this report distinguishes between two types of working-age recipients of social security benefits: those eligible because they meet the disability criteria established by the Social Security Administration and all other recipients.6 This distinction is not captured directly in the SIPP survey. However, sufficient information is provided to develop a good estimate of the type of beneficiary. We used the Medicare Beneficiary Index Code developed by Vaughan (1989) to determine whether the receipt of benefits from the Social Security program was due to the recipient's disability (disabled worker, disabled widow or widower, or adult disabled child). Due to data limitations, our classification scheme to define disability-benefit receipt could be applied only to persons ages 18 to 64. Specifically, SIPP does not measure the reasons for Social Security receipt by persons in other age groups.

C. PROGRAM PARTICIPATION

SIPP allows us to examine the participation patterns of the population with and without disabilities in a broad spectrum of programs sponsored at least in part by the federal government. The programs considered in this study are listed in Table II.1, grouped by the nature of the benefits (cash versus in-kind benefits), by whether or not eligibility is limited to those with limited financial resources (means-tested programs), and by whether or not the programs provide health insurance.

We examine participation in single programs, focusing on Social Security, SSI, food stamps, and AFDC, and then consider how these programs overlap. To complete the picture of benefits issued to the disabled population, we include three residual benefit categories: other cash welfare (General Assistance and other welfare), other cash benefits (Railroad Retirement, Unemployment Compensation, Veterans' Compensation and Pensions, and Workers' Compensation and other temporary disability benefits), and other in-kind benefits (Housing Assistance, Energy Assistance, WIC, and free and reduced-price meals received by children in the household under the National School Lunch and Breakfast Programs). The interaction of these programs and federally sponsored health insurance programs (Medicare and Medicaid) are also examined.

Non-Means-Tested Cash Transfer Programs Old Age Survivors and Disability Insurance (Social Security) Program Railroad Retirement Program Unemployment Compensation Program Veterans Compensation and Pension Program Workers Compensation and other temporary disability benefits

Means-Tested Cash Assistance Programs Supplemental Security Income (SSI) Aid to Families with Dependent Children (AFDC) General Assistance Other Cash Welfare

In-Kind Transfer Programs Food Stamp Program Public and Subsidized Housing Programs Energy Assistance Program National School Lunch Program (free and reduced-price meals) National School Breakfast Program (free and reduced-price meals) Supplemental Feeding Program for Women, Infants, and Children (WIC)

Health Insurance Programs Medicare Medicaid

SIPP allows us to choose different units of analysis--individuals, programs, families, and households. Furthermore, there are several options for measuring program participation for individuals:

Direct coverage, where an individual is reported to receive benefits from a particular program or is reported to be part of a program unit that receives benefits

Family coverage, where an individual is a member of a family in which at least one member receives benefits from a particular program

Household coverage, where an individual is a member of a Census household in which at least one member receives benefits from a particular program

Because we focus on the participation patterns of the disabled population, we use the individual as the unit of analysis and measure program participation based on the individual's direct association with each program. However, we do include in this study a measure of economic-well being which is a function of the income receipts of the Census household.

The analysis is tailored to each age group. Among the working-age population, Social Security program participants are divided into those who are classified as disabled as described in the preceding section (SSDI participants) and everyone else (other Social Security participants). For the elderly (persons age 65 or older), we do not examine AFDC program participation separately due to sample size restrictions; rather, we include these benefits with other cash welfare. We also do not distinguish between types of Social Security benefits among elderly persons. The program participation patterns of children focus on Social Security, AFDC, food stamps, and the three residual benefit categories, since SIPP does not capture the participation of children in SSI.

D. VALIDITY OF SIPP ESTIMATES OF PROGRAM PARTICIPATION

Household survey data are subject to underreporting, and SIPP is no exception. However, SIPP data are well reported relative to other household survey data and thus provide an excellent source of information to examine the program participation patterns of the disabled population. This section provides some background information on the quality of the program participation patterns reported in SIPP. Mathematica Policy Research, Inc. (1989) discusses the information on disability reported in SIPP.

1. Recipients of Disability Benefits Ages 18 to 64

Among persons ages 18 to 64, SIPP reports that 3.1 million Social Security recipients are disabled, 1.7 million per-sons receive federally-administered SSL and 2.5 million persons are covered under Medicare (see Table II.2). As is often the case with survey data, these estimates do not precisely match administrative counts of participants under these programs. The Social Security Bulletin (Annual Statistical Supplement for 1984-1985) reports that there were 2.6 million disabled workers, 100 thousand widows or widowers, and 500 thousand disabled social security adult children in December 1984, for a total of 3.2 million disabled Social Security beneficiaries. Thus, SIPP estimates compare favorably with program counts. However, this comparison ignores differences in the universe between administrative statistics and SIPP, such as the restriction of the SIPP sample to non-institutionalized individuals. Vaughan (1989) compared SIPP estimates from Wave 1 with independent estimates of disabled workers and aged or disabled widows and widowers (ages 18 to 64) in the survey universe and found that the total in SIPP was underreported by 3 percent. However, SIPP overrepresented the number of disabled workers by 2 percent.

The SSI caseload as reported in SIPP compares favorably with administrative statistics on disabled participants ages 18 to 64 with both showing 1.7 million.7 According to Annual Medicare program statistics (Health Care Financing Administration, 1987) there were 2.9 million disabled persons actually enrolled in the Medicare in July 1984. However, than SIPP-based estimates indicated that 2.5 million persons ages 18 to 64 were covered under Medicare in April of that year.8

SOURCE: Wave 3 of the 1984 Panel of SIPP Supplemented with data from Waves 1, 2, and 4.

For this analysis, disabled Social Security participants are defined to be SSDI participants between the ages 18 and 64. Social Security recipients under age 18 or over age 65 with disabilities are not classified as disabled. Burwell, Preston, and Bailey (1989) provide a description of the disability criteria established by the Social Security Administration.

SIPP does not measure SSI recipiency for persons under age 15. Eligibility criteria established for the SSI program are discussed in Burwell, Preston, and Bailey (1989).

Includes a small number of SSI recipients ages 15 to 17.

2. Total Program Participation

According to SIPP, 33.8 million persons in the civilian noninstitutionalized population were covered under the Social Security program (inclusive of SSDI), 9.8 million individuals were covered under AFDC, and 19 million were covered under the Food Stamp Program in April 1984. Corresponding administrative estimates are that 36.3 million participated in the Social Security program (Social Security Bulletin, July 1994), 11 million persons participated in AFDC in April 1984 (Social Security Bulletin, Annual Statistical Supplement, 1984-1985), and 21.2 million participated in the Food Stamp Program in April 1984 (U.S. Department of Agriculture, 1989).

These two sets of numbers are not directly comparable, because some participants in the each of these programs were not in the SIPP universe at the time these data were collected. After adjusting for this discrepancy in the figures, the U.S. Bureau of the Census (1985a) determined that the number of persons participating in the Social Security program was underreported in SIPP by 2.5 percent, the number of AFDC participants was underreported by 18 percent, and the number of food stamp participants was underreported by 10 percent. While such underreporting reflects biased counts of the level of program participation, it does not necessarily reflect bias in the distributional characteristics of program participants in terms of their level of functional or work limitations (or any other characteristic). The distributional characteristics will remain unbiased as long the underreporting is random.

We do not have independent administration benchmark figures for the Medicaid program that are comparable to the Medicaid participation figures reported in SIPP. As reported in the Social Security Bulletin, Annual Statistical Supplement, 1984-1985, 21.4 million persons ages 18 to 64 received Medicaid benefits in fiscal year 1984. This is 21 percent higher than the SIPP-based estimate for April 1994 of 17.7 million persons covered under this program. Theoretically, the administrative estimate could be lower than the SIPP estimate because persons might report Medicaid coverage in SIPP without having utilized services covered under the program. However, it is higher in part because it includes persons in institutions, a population not covered in SIPP.

E. ACCURACY OF THE ESTIMATES

The estimates presented herein are derived from a sample rather than from a complete census of the population. Therefore, they are subject to both sampling and nonsampling error.9 While we cannot completely compensate for all of these errors, most are rninimized by the Census Bureau in generating the data. For example:

Item Nonresponse and Inconsistencies across Responses. These problems are corrected in part by the editing and imputation procedures used by the Census Bureau to produce the data.

In addition, in preparing this report, we took several steps to identify estimates which have low statistical reliability. First, when the standard error of estimates exceeded 30 percent of the estimate's value, we sometimes chose to combine two or more categories to obtain a sufficiently large sample to produce an acceptably accurate estimate.10 In the remaining cases where a reported estimate has a standard error that exceeds 30 percent, we mark the figure with a symbol ^^.

Second, the report discusses differences 'in numbers only if the difference is found to be statistically significant at the 90 percent level, using a two-tailed test.

The next three chapters explore program participation patterns of the disabled population. These are followed by an analysis of participation rates in the SSI program among eligible individuals. The report concludes with a study of the impact of federal assistance programs on the poverty status of persons with disabilities.

Program statistics can tell us the proportion of a program's caseload that qualifies as disabled under that program's definition of disability (which is usually based on the ability to work and on previous work history). Program statistics cannot tell us the extent to which the program is serving individuals who qualify as disabled under alternative definitions, however. SIPP data are unique in that they permit an analysis, which is undertaken here, of federal assistance payments to persons with disabilities under a variety of disability definitions. We begin this analysis with a summary of the proportion of federal program participants among the noninstitutionalized population who are persons with limitations in functioning. The proportion of the caseloads of 14 major assistance programs that comprise disabled persons is examined separately for three age groups: persons younger than age 18, persons ages 18 to 64 (the working-age population), and persons ages 65 and older.11

The major findings from this analysis are that:

Social security and SSI disability benefits are well targeted: most working-age persons who receive these disability benefits report substantial functional limitations, and at least some limitation in work.

Two-thirds of the Medicare participants ages 18 to 64 report substantial functional limitations, while one-fifth report no limitation in functioning.

Although the AFDC, Food Stamp, and Medicaid Programs are not targeted toward the disabled population, a significant portion of the participants ages 18 to 64 report substantial functional limitations (17 percent for AFDC, 22 percent for food stamps, and 28 percent for Medicaid).

The programs serving the low-income elderly population (SSI, Food Stamps and Medicaid) also serve the low-income disabled elderly-more than three-fourths of the participants ages 65 and older have substantial functional limitations.

Less than half (44 percent) of the elderly participants in social security and Medicare are disabled.

The presence of physical, mental, or emotional impairments is more common among children who participate in the Social Security program than it is among the population of children as a whole.

A. WORKING-AGE ADULTS

Our analysis of the prevalence of disabilities among working-age program participants is divided into two parts. First, programs targeted toward disabled adults are discussed, and the interaction between one program definition of disability and two other definitions is illustrated. Second, the coverage of individuals with functional and work limitations by programs which do not focus on the disabled population directly but which nonetheless provide an important source of financial assistance to disabled persons is examined.

1. SSDI, SSI, and Medicare

This section begins with a discussion of the proportions of the SSDL SSL and Medicare caseloads which report limitations in functioning or work. Given that these programs are targeted toward the work-disabled, we expect a high but not perfect correlation between limitations in functioning and the receipt of disability benefits. This correlation is confirmed in Table III.1, which shows that most disabled persons (according to each program's definition of disability) ages 18 to 64 report a substantial functional limitation (75 percent of SSDI participants, 58 percent of SSI participants, and 70 percent of Medicare participants). However, a surprisingly large proportion of persons who receive disability benefits do not report a substantial functional limitation. In fact, 15 percent of SSDI participants, 26 percent of SSI participants, and 19 percent of Medicare participants report no limitation in functioning.12 Although we do not dismiss the possibility that the survey estimates are subject to some measurement error, there are circumstances which could explain these figures. For example, an individual could have a mental impairment severe enough to qualify him or her for disability benefits, but not have any limitations in the types of functions captured in SIPP.

TABLE III.1: Prevalence of Limitations in Functioning and in Work Among Federal Program Participants Ages 18 to 64: April 1984

Total

Persons inHouseholds Below 150% of Poverty

SSDI

Other Social Security

SSI

AFDC

FoodStamps

Medicare

Medicaid

Total (thousands)

143,357

28,644

3,142

4,239

1,660

3,702

8,346

2,506

7,355

Percent Distribution by Level of Limitations in Functioning

Total

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Needs assistance with ADLs

0.8

1.8

13.5

1.1^^

14.5

1.4^^

2.3

13.0

4.7

Needs assistance with IADLs

1.4

2.8

20.0

2.6

14.4

3.5

4.3

18.4

6.6

Inability in one or more functions

2.6

4.9

24.3

6.2

17.9

4.5

7.1

23.7

8.7

Difficulty in two or more function

3.3

6.2

16.6

8.2

11.1

7.3

8.7

15.1

8.4

Subtotal: Substantial Functional Limitation

8.1

15.7

74.5

18.1

58.0

16.7

22.3

70.2

28.4

Difficulty in only one function

7.0

9.2

10.7

12.9

16.0

9.3

10.5

10.6

11.1

No limitations in functioning

84.9

75.0

14.8

69.0

26.0

74.0

67.2

19.2

60.4

Percent Distribution by Level of Work Limitations

Total

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Prevented from working

5.6

12.9

88.1

15.5

73.0

13.7

19.5

80.0

29.5

Unable to work full time or regularly

1.7

2.6

3.5

6.7

5.4

3.9

3.6

3.0^^

4.4

Otherwise limited in kind or amount

5.2

5.9

3.6

4.6

5.4

5.8

6.4

5.0

6.4

Not limited

87.5

78.6

4.9

73.1

16.2

76.6

70.5

12.0

59.6

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. ^^: Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

With one exception, the distributions of SSDI, SSI, and Medicare participants ages 18 to 64 by level of work limitation are similar to the distributions by level of limitations in functioning. The exception is that a substantially smaller proportion of disability benefit recipients report no work limitations (5 percent of SSDI participants, 16 percent of SSI participants, and 12 percent of Medicare participants) than report no limitations in functioning. However, given that eligibility for these programs is based on the inability to work, it is somewhat surprising that any participants report no work limitations. This may be an artifact of the method used in SIPP to measure work limitations.13 On the other hand, this finding could reflect situations in which the individual is able to work, but only in a sheltered environment or only at very low-paying jobs in which his or her earnings do not exceed the limits set by the SSDI and SSI programs for substantial gainful activity.

2. Other Programs

In this section, we focus on four programs which are not targeted specifically toward the disabled population but which (for the most part) contain some provisions affecting persons with disabilities. These programs are (1) the components of the Social Security program which do not provide benefits to disabled individuals (other Social Security); (2) AFDC, which contains a provision to provide benefits to families with children if one parent is incapacitated; (3) the Food Stamp Program, whose eligibility criteria are more generous for households, that contain disabled members; and (4) Medicaid, which covers many disabled SSI recipients. First, we examine statistics on program participants by the level of limitation in functioning.

An examination of administrative statistics tells us that relatively few participants in these four programs are disabled according to the respective programs definition. By definition, administrative data indicate that no other Social Security beneficiaries are disabled. In contrast, SIPP-based estimates indicate that one-fifth (18 percent) of the recipients of other Social Security benefits have a substantial functional limitation. The Committee on Ways and Means (1988) indicates that, in fiscal year 1994, 4 percent of the AFDC families contained an incapacitated parent, yet Table III.1 shows that 17 percent of the working-age population covered under AFDC have a substantial functional limitation.14 The U.S. Department of Agriculture (1984) illustrates that 2 percent of individuals covered under food stamps in August 1994 were classified as disabled due to the receipt of disability benefits. On the other hand, Table III.1 shows that 22 percent have substantial functional limitations. Finally, the Social Security Bulletin, Annual Statistical Supplement (1984-1985) shows that 14 percent of Medicaid recipients in fiscal 1984 (2.9 million of 21.4 million from Table 153) were either blind or permanently and totally disabled, but SIPP-based estimates indicate that 28 percent of individuals covered under Medicaid in April 1984 had a substantial functional limitation. Most of the program participants who report a substantial functional limitation have only moderate levels of limitations (an inability to perform one or more functions or difficulty in performing two or more functions but no limitations in ADLs or IADLs).

Similarly, a significant number of working-age participants in these programs are prevented from working (16 percent of other Social Security participants, 14 percent of AFDC participants, 20 percent of food stamp participants, and 30 percent of Medicaid participants) and are limited in, but not prevented from, working (11 percent of other Social Security and Medicaid participants and 10 percent of AFDC and food stamp participants).

The prevalence of persons with limitations in functioning among program participants does not appear to be an artifact of the prevalence of persons with limitations in functioning in the population as a whole. In fact, the distribution of other Social Security participants by level of limitations in functioning is more skewed toward the severe levels of limitations in functioning than is the distribution for the total population--18 percent have substantial functional limitations compared to 8 percent of the total population. Similarly, the distributions of food stamp and Medicaid participants are more skewed toward the severe levels of limitations in functioning than is the distribution of the total low-income population.15 Eleven percent of the Medicaid participants and 7 percent of the food stamp participants need assistance with ADLs and IADLs compared to 5 percent of the low-income population. A similar pattern exists for the distributions by levels of work limitation.

Because the Medicaid and Food Stamp programs are need-tested, the difference in the distributions of program participants and the total low-income population by level of limitations in functioning can be attributed to two factors. First, a person with a more severe level of limitation in functioning may be more likely to be eligible for these programs due to his or her lower income and asset levels. Second, eligible persons with more severe levels of limitations in functioning may participate in these programs at a higher rate than do the other eligible persons.

On the other hand, since the Social Security program is not a welfare program participation in other Social Security is higher among working-age adults with substantial functional limitations than among the total population, because their rate of eligibility is higher. Differences in eligibility are likely associated with the lower income of such individuals relative to persons without substantial functional limitations, as reported in Mathematica Policy Research (1989), and hence with the increased likelihood that they meet the income cutoff imposed by the Social Security program on survivors and dependents of retired and disabled workers.

B. THE ELDERLY

For the most part, programs that serve elderly person do not have special provisions for the population of disabled elderly. Thus, based on program rules, we do not expect to find differences between the proportions of elderly individuals with various levels of limitations in functioning in the population as a whole and the proportions of such individuals in the Social Security or Medicare participant populations. Nor do we expect to find differences among the distributions of elderly persons with different levels of limitations in functioning among the total low-income population and the in SSL food stamps, or Medicaid participant populations.

As shown in Table III.2 there are few differences among the distributions of elderly persons with limitations in functioning by level of limitation in the total population and the Social Security and Medicare participant population. Instead, these distributions are very similar, with approximately 6 percent reporting the need for assistance with ADLs and 41 percent reporting no limitations in functioning.16

TABLE III.2: Prevalence of Limitations in Functioning Among Federal Program Participants Ages 65 and Older: April 1984

On the other band, differences exist among these distributions in the low-income population and the SSI, food stamp, and Medicaid participant populations. Proportionately more elderly persons who participate in one (or more) of these programs report a substantial functional limitation than elderly persons in all low-income households. Three-fourths of the elderly participants in these programs have a substantial functional limitation, compared with 61 percent of the total low-income elderly population. On the other hand, the proportion of elderly participants in these programs who report difficulties with one function is half that of the total low-income elderly population.17 These differences can be attributed to differences in the proportion who are eligible for each program and to differences in the rate at which eligibles in each program participate.

C.CHILDREN

Children with disabilities account only for a small proportion of the total population (4 percent) or of the low-income population (5 percent). Surprisingly, children with impairments are no more prevalent among AFDC and food stamp participants than they are among the low-income population as a whole. Nonetheless, they do account for 10 percent of the Social Security participants younger than age 18, and 7 percent of the Medicaid recipients in that age group (see Table III.3). In general, physical limitations are more prevalent than mental or emotional limitations among children younger than age 18. However, among Social Security participants younger than age 18, slightly fewer (4 versus 6 percent) have physical limitations.

TABLE III.3: Prevalence of Limitations in Functioning Among Federal Program Participants Under Age 18: April 1984

In this chapter, we examine single and multiple program participation patterns among persons with limitations and compare them with the participation patterns of the total population. The programs considered are four of the individual programs examined earlier (Social Security, SSI, food stamps, and AFDC) plus the following three residual categories: cash welfare other than SSI and AFDC, cash transfer programs other than Social Security, and in-kind benefits other than food stamps, Medicare, and Medicaid.18 For convenience, we refer to the set of programs examined here as federal assistance programs, even though they do not include all federally subsidized cash and in-kind programs. As in the last chapter, the analysis is divided into three sections corresponding to three age groups--the working-age population (persons ages 18 to 64), the elderly (persons age 65 or older), and children (persons younger than age 18). Among the working-age population, we examine both limitations in work and limitations in functioning, and distinguish between the receipt of Social Security benefits for reasons of disability and Social Security benefit receipt for other reasons.

In summary we find:

Persons ages 18 to 64 with disabilities are more likely than their counterparts in the total population to receive SSI and SSDI benefits, and the likelihood increases as the severity of limitations in functioning and work limitations increases.

Children and working-age adults with disabilities are more likely than their counterparts in the total population to participate in the other federal assistance programs (other Social Security, AFDC, food stamps and smaller programs).

Most elderly individuals are covered under the Social Security program, and participation does not appear to be influenced by the severity of the limitation in functioning. On the other hand, participation in the SSI program increases with the severity of the limitation in functioning, and elderly persons with a substantial functional limitation participate in the other federal assistance programs at a higher rate than does the total population of elderly persons.

Federal assistance programs in combination are more successful in reaching most of the low-income population with disabilities than they are the low-income population in general. Nonetheless, among those in low-income households, one-fourth of working-age adults with substantial functional limitations, 16 percent of working-age adults prevented from work and one-fifth of children with impairments do not receive benefits under any of these programs.

A. THE WORKING-AGE POPULATION

Social Security program participation among the adult population ages 18 to 64 is examined separately by type of benefits--SSDI versus other Social Security. In addition, participation among the working-age adult population in SSI, AFDC, food stamps, other cash welfare, other cash benefit, and other in-kind benefit programs is analyzed. Participation rates by program are presented first, followed by patterns of multiple program participation.

1. Participation in Selected Programs

The participation rates presented in this section reflect the ratios of program participants to the total population. These rates are computed separately for persons classified as disabled under two different definitions of disability, (i.e., substantial functional limitation and prevented from working), and for persons grouped by the level of the severity of disability. The rates among individuals with disabilities are compared with corresponding rates among the total population.

The working-age population overall participates in the SSDI program at rate of 2 percent (see Table IV.1). In other words, 2 percent of all persons ages 18 to 64 meet both the disability and work history requirements established for the Social Security program. The SSDI participation rate is somewhat smaller than comparable estimates presented in Mathematica Policy Research (1989), for two reasons. First, in this report, we are concerned with direct participation in the program rather than with the receipt of Social Security benefits by the household, as was the case in the earlier report. Second, we focus our attention here on the participants in the DI component of the program rather than on the total caseload.

Persons with limitations in functioning or work limitations participate at much higher rates than do total persons ages 18 to 64. In fact, the participation rate increases as the severity of the limitation in functioning or work increases. More than one-third (36 percent) of persons who need assistance with ADLs and 35 percent of persons prevented from working participate in the SSDI program. In contrast, less than I percent of persons with no limitations in functioning and persons with no work limitations receive SSDI benefits.

The same pattern emerges when we examine SSI participation among persons with different levels of limitations in functioning and in work limitations. While the overall participation rate in the SSI program is 1 percent of the working-age population, the rate increases as the level of the severity of limitation in functioning increases. Less than one-half of one percent of persons with no limitations in functioning participate in SSI, yet 20 percent of persons who need assistance with ADLs do so. The rate ranges from less than one-half of one percent for persons with no work limitations to 15 percent for persons prevented from working.

TABLE IV.1: Percentage of Individuals Ages 18 to 64 Participating in Selected Government Programs Among the Noninstitutionalized Working-Age Population, by Disability Status: April 1984

Disability Status

TotalPopulation (thousands)

Percent Participating In:

SSDI

OtherSocial Security

SSI

AFDC

Food Stamp

OtherCash Welfarea

OtherCash Benefitsb

OtherIn-Kind Benefitsc

Total

143,357

2.2

3.0

1.2

2.6

5.8

1.0

4.1

11.5

Presence of a Limitation in Functioning

Needs assistance with ADLs

1,187

35.7

3.9^^

20.3

4.3^^

16.1

2.1^^

11..7

20.0

Needs assistance with IADLs

1,991

31.6

5.6

12.0

6.5

17.8

2.3^^

11.9

26.8

Inability in one or more functions

3,757

20.3

7.0

7.9

4.4

15.8

2.9

11.1

20.7

Difficulty in two or more functions

4,694

11.1

7.4

3.9

5.8

15.4

3.2

8.8

21.3

Subtotal: Substantial Functional Limitation

11,629

20.1

6.6

8.3

5.3

16.0

2.9

10.3

21.9

Difficulty in only one function

10,051

3.3

5.4

2.9

3.4

8.7

1.4

5.9

15.2

No Limitations in Functioning

121,676

0.4

2.4

0.4

2.3

4.6

0.8

3.3

10.2

Presence of a Work Limitation

Prevented from Working

8,025

34.5

8.2

15.1

6.3

20.3

3.0

12.4

26.0

Unable to work full-time or regularly

2,456

4.4

11.6

3.7

5.8

12.3

2.9^^

10.0

17.1

Otherwise limited in kind or amount

7,468

1.5

2.6

1.2

2.9

7.2

1.8

9.0

13.7

Not limited

125,407

0.1

2.5

0.2

2.3

4.7

0.8

3.1

10.3

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. ^^: Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

Other cash welfare includes cash welfare and other than AFDC and SSI.

Other cash benefits include benefits from the following programs: Railroad Retirement, Veterans Compensation and Pensions, Unemployment Compensation, Workers Compensation, and other temporary disability.

Other cash welfare includes cash welfare and other than AFDC and SSI. b.Other cash benefits include benefits from the following programs: Railroad Retirement, Veterans Compensation and Pensions, Unemployment Compensation, Workers Compensation, and other temporary disability. c.Other in-kind benefits include benefits received from the following programs: Public and Subsidized Housing, Energy Assistance, National School Lunch and Breakfast (free and reduced-price meals only), and WIC.Other in-kind benefits include benefits received from the following programs: Public and Subsidized Housing, Energy Assistance, National School Lunch and Breakfast (free and reduced-price meals only), and WIC.

Programs that are not targeted toward the disabled (except other cash welfare) serve larger proportions of the population overall (from 3 to 12 percent, as shown in, Table IV.1) than do programs which are targeted toward the disabled, but, in general, they do not serve larger portions of the population with substantial functional limitations. Furthermore, the rate of participation does not increase with the level of disability, as it did for the SSDI and SSI programs. However, we still observe that persons with substantial functional limitations and persons with more severe work limitations participate in these programs at higher rates than does the overall population. For example, 3 percent of the working-age population, 7 percent of the working-age population with substantial functional limitations, and 8 percent of those prevented from working receive other Social Security benefits. The highest rates of participation are among persons with moderate disabilities.

2. Multiple Program Participation

We now turn our attention to the combined benefit package. In this section, we examine multiple program participation, as presented in Table IV.2. This Table portrays unique combinations of benefits from the Social Security, SSI, AFDC, and Food Stamp programs and how these benefits interact with the three residual groups of programs (other cash welfare, other cash benefits, and other in-kind benefits).19

About one in five individuals ages 18 to 64 receives assistance from the federal government. In general, Table IV.2 shows that persons with disabilities are more likely to receive federal assistance than are persons without disabilities. However, a significant number of working-age adults are still without federal assistance and reside in low-income households.

Together, SSI and Social Security serve almost one-third (32 percent) of the population with substantial functional limitations, while all other federal assistance programs (of those examined here) serve about one-fourth (23 percent). The remaining 45 percent do not receive benefits from any of the federal assistance programs analyzed here. The high proportion of persons who lack assistance merits some concern. In particular, 9 percent of those with substantial functional limitations do not participate in any of these programs but can be considered in need because they live in low-income households. This reflects 1.1 million persons or 24 percent of the low-income population with substantial functional limitations.20 These individuals may be nonparticipants because they did not apply for benefits out of choice, or because they were not aware of the program or their eligibility. On the other hand, they may be ineligible for the programs. Finally, this group may include some observations for which a measurement problem occurred, such as the nonreporting of income or program participation.

TABLE IV.2: Percentage of Individuals Ages 18 to 64 Participating in Multiple Government Programs Among the Non-Institutionalized Population, by Disability Status: April 1984

Total

Personswith Substantial FunctionalLimitations

Personswithout Substantial FunctionalLimitations

Person Prevented fromWorking

Personsnot Prevented fromWorking

Total (thousands)

143,357

11,629

131,727

8,025

135,331

Percent Distribution by Program Combinations

100.0%

100.0%

100.0%

100.0%

100.0%

Social Security (SOC SEC)

5.1

26.7

3.2

42.7

2.9

SSDI only

1.2

11.6

0.3

19.8

0.1

Other SOC SEC only

2.4

4.7

2.2

6.1

2.2

SOC SEC & SSI

0.3

2.7

0.1

5.2

0.0

SOC SEC & food stamps

0.4

2.9

0.2

4.7

0.1

SOC SEC & AFDC

0.1

0.4^^

0.0

0.6^^

0.0

SOC SEC & cash welfare

0.0

0.2^^

0.0

0.3^^

0.0

SOC SEC & cash benefits

0.5

3.0

0.2

5.0

0.2

SOC SEC & in-kind

0.8

5.7

0.4

8.5

0.4

SSI, No SOC SEC

0.8

5.6

0.4

10.0

0.3

SSI only

0.3

2.1

0.1

3.6

0.1

SSI & FS

0.3

2.5

0.2

4.5

0.1

SSI & AFDC

0.1

0.3^^

0.1

0.8^^

0.0

SSI & cash welfare

0.0

0.2^^

0.0

0.4^^

0.0

SSI & cash benefits

0.0

0.1^^

0.0

0.1^^

0.0

SSI & in-kind

0.4

2.5

0.2

4.9

0.2

SSI & SOC SEC

0.3

2.7

0.1

5.2

0.0

SSI, SOC SEC only

0.1

0.9

0.1

1.9

0.0

SSI, SOC SEC & food stamps

0.1

1.0

0.0

2.0

0.0

SSI, SOC SEC & AFDC

0.0

0.2^^

0.0

0.3^^

0.0

SSI, SOC SEC & other welfare

0.0

0.1^^

0.0

0.2^^

0.0

SSI, SOC SEC & cash benefits

0.0

---

0.0

0.1^^

---

SSI, SOC SEC & in-kind

0.1

1.2

0.0

2.1

0.0

Food Stamps (FS) No SOC SEC, No SSI

5.1

10.6

4.6

11.0

4.8

FS only

0.87

1.7

0.7

1.9

0.8

FS & AFDC

2.0

4.1

1.8

4.2

1.9

FS & cash welfare

0.7

2.1

0.6

2.3

0.7

FS & cash benefits

0.2

0.8

0.2

0.9^^

0.2

FS & in-kind

3.5

6.9

3.2

7.3

3.3

AFDC & Not Above

0.4

0.5^^

0.4

0.7^^

0.4

Other Not Above

9.6

12.0

9.4

10.1

9.6

Other cash welfare

0.2

0.3^^

0.2

0.2^^

0.2

Other cash benefits

3.4

6.4

3.1

6.4

3.2

Other in-kind

6.5

6..4

6.5

4.8

6.6

None

78.9

44.5

81.9

25.6

82.0

Households above 1.5*poverty

69.5

35.1

72.5

18.4

72.5

Households below 1.5*poverty

9.3

9.3

9.3

7.2

9.5

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2 and 4. ^^: Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

The picture changes somewhat when we examine work limitations, as indicated by the targeting of SSDI toward persons who are unable to work. Over half (53 percent) of the working-age population who are prevented from working are covered under either Social Security or SSI, or both; 22 percent are covered under other programs but not Social Security or SSI, and 26 percent have no coverage at all. Over one-fourth of the latter group (7 percent of the total population) reside in households whose incomes are below 150 percent of poverty. This reflects just over half million (578 thousand) persons prevented from work in low-income households or 16 percent of the low-income population prevented from work.21 The primary difference between the program participation patterns of those with substantial functional limitations and those of persons who are prevented from working Les in the proportion who rely on Social Security and the proportion with no benefits. Twenty-seven percent of those with substantial functional limitations receive Social Security, and 45 percent receive no benefits; 43 percent of those who are prevented from working receive Social Security, and 26 percent are not covered under any of the programs examined here.

Although Social Security and SSI play an important role among persons with substantial functional limitations, they are not the sole source of assistance. Some individuals receive benefits under all of the programs displayed in Table IV.2. Furthermore, no single combination of programs seems to dominate. The most common program combination is SSDI only (12 percent), followed by food stamps and in-kind benefits but not Social Security or SSI (7 percent). In the latter case the in-kind benefits are predominantly subsidized meals under the National School Lunch and Breakfast Programs, but a considerable number have housing and energy assistance.22

Other in-kind benefits comprise a large component of the multiple benefits package of persons with substantial functional limitations. Aside from the combination of food stamps and in-kind benefits just noted, 6 percent receive Social Security and in-kind benefits, and 6 percent receive in-kind benefits but not Social Security, SSI, food stamps, or AFDC In the former case, all three in-kind programs are important--housing, energy assistance, and subsidized meals for children in the household, whereas in the latter case the other in-kind benefits are predominantly subsidized meals for children in the household. These programs have more generous income eligibility standards than do the other means-tested transfer programs. For example, to be eligible for subsidized meals, children must be attending school, and the income of the family may be as high as 185 percent of the poverty level. In contrast, the Food Stamp Program imposes a limit on income net of deductible expenses of 100 percent of poverty on households which do not contain an elderly or disabled individual.

Among persons prevented from working, some combinations of programs are more common. For example, 20 percent of those prevented from working receive SSDI only, 9 percent receive Social Security and in-kind benefits, and 7 percent receive food stamps and SSL but not Social Security or SSI.

The patterns of multiple program participation among persons with substantial functional limitations, and among persons prevented from working differ from the pattern of multiple program participation among the total population. A higher proportion of persons with disabilities are covered under at least one program than among the total population (55 percent of those with substantial functional limitations and 74 percent of persons prevented form working, compared with 21 percent of the total population). In addition, the most common program combinations for the total population are concentrated in in-kind benefits (7 percent receive in-kind benefits but not Social Security, SSI, food stamps, or AFDC, and 4 percent receive food stamps and in-kind benefits but not Social Security or SSI). Furthermore, the estimates in Table IV.2 suggest that the federal assistance programs are more effectively targeted among persons with disabilities than they are among the total working-age population. Nearly half of the low-income population receives no benefits under these programs23 compared to 24 percent of low-income persons with substantial functional limitations and 16 percent of low income persons prevented from work.

B. THE ELDERLY POPULATION

As with the working-age population, program participation among the elderly population centers around several programs: Social Security, SSI, food stamps, other cash welfare, other cash benefits, and other in-kind benefits.24 More than 9 of 10 elderly persons (92 percent) receive Social Security benefits, and their participation varies only slightly by their level of limitation in functioning (see Table IV.3). Persons who need assistance with ADLs participate at a rate of 90 percent, while the participation rate among persons who are unable to perform one or more functions, or have difficulty doing so, is 94 percent.

Less than 10 percent of elderly persons (7 percent) participate in SSI although their participation rates increase as their level of the severity of disability increases, ranging from 3 percent for persons with no limitations in functioning to 16 percent for persons who need assistance with ADLs. The higher rate of participation among persons with substantial functional limitations (12 percent) reflects the higher level of poverty (and, indirectly, eligibility for SSI) among this group, as observed by Mathematica Policy Research, Inc. (1989). It also reflects the higher participation rates among SSI-eligible individuals with substantial functional limitations discussed in Chapter VI of this report. However, neither the poverty rate reported in Mathematica Policy Research, Inc. (1989) nor the participation rates in Chapter VI exhibit an increasing pattern in terms of severity of disability similar to that observed in Table IV.3.

Other cash benefits play a more important role among the elderly than they do among the working-age population. Furthermore, participation rates among those with substantial functional limitations are higher than among those without.25 However, the difference is not as dramatic, as the difference observed for each of the other programs.

TABLE IV.3: Percentage of Individuals Ages 65 and Older Participating in Selected Government Programs Among the Noninstitutionalized Elderly Population, by Disability Status: April 1984

Disability Status

TotalPopulation (thousand)

Percent Participating In:

Social Security

SSI

Food Stamps

OtherCash Welfarea

OtherCash Benefitsb

OtherIn-Kind Benefitsc

Total

26,314

92.6

6.8

5.2

0.5

8.1

10.1

Presence of a Limitation in Functioning

Needs assistance with ADLs

1,683

89.9

16.2

9.9

0.8^^

11.1

12.8

Needs Assistance with IADLs

2,799

92.7

13.3

8.1

1.1

10.9

15.3

Inability in one or more functions

3,713

93.5

11.5

10.7

0.6^^

10.0

15.3

Difficulty in two or more functions

3,405

93.8

8.2

8.0

0.9^^

9.3

12.3

Subtotal: Substantial Functional Limitation

11,601

92.9

11.6

9.2

0.8

10.2

14.1

Difficulty in Only One Function

3,866

93.8

3.6

2.9

0.2^^

7.5

9.5

No Limitations in Functioning

10,848

91.8

2.8

1.8

0.1^^

6.1

6.0

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. ^^: Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

Other cash welfare includes cash welfare except SSI.

Other cash benefits include benefits from the following programs: Railroad Retirement, Veterans Compensation and Pensions, Unemployment Compensation, Workers Compensation, and other temporary disability.

Other in-kind benefits include benefits received from the following programs: Public and Subsidized Housing, Energy Assistance, National School Lunch and Breakfast (free and reduced-price meals only), and WIC.

Only 5 percent of the elderly population participate in the Food Stamp Program. Persons with substantial functional limitations participate at almost twice that rate (9 percent), with relatively little variation across the first four levels of limitations in functioning. These rates seem low in light of the fact that over one-fourth (28 percent) of elderly individuals reside in households whose incomes were below 150 percent of poverty in April 1984 (see Mathematica Policy Research, Inc, 1989). (Most households that contain an elderly individual and whose income is below 185 percent of poverty would be eligible for food stamps as long as their assets do not exceed $3,000). The relatively low incidence of Food Stamp Program participation among the elderly population reflects the choice of a substantial number of elderly persons who qualify for the program not to participate in the program. Doyle and Beebout (1988) report that in August 1984 only 35 percent of the elderly individuals in households eligible for the Food Stamp program actually participated. The higher incidence of participation among persons with substantial functional limitations may reflect an increased tendency to live alone among the group, since Doyle and Beebout (1998) observed an increase in food stamp participation rates among elderly persons who lived alone. However, it is more likely that elderly persons with substantial functional limitations live in households entitled to higher food stamp benefits because they are at greater risk of living near or below the poverty level (Mathematica Policy Research, 1989).

Other in-kind benefits are more prevalent among the elderly population than are food stamps--10 percent participate in at least one other in-kind benefit program such as subsidized housing. However, as with food stamps, the participation rate observed for persons with substantial functional limitations (14 percent) exceeds the rates for other elderly individuals (10 percent of elderly persons who have difficulty with one function and 6 percent of elderly persons without limitations in functioning participate in at least one of these programs).26

As expected, given their high rate of participation in the Social Security program, relatively few elderly persons do not receive any form of federal assistance (4 Percent as shown in Table IV.4). The rate of nonparticipation is lower among those with substantial functional limitations (2 percent) than it is among the total population. Less than one percent of persons who reside in low-income households do not receive federal assistance.

TABLE IV.4: Percentage of Individuals Ages 65 and Older Participating in Multiple Government Programs Among the Noninstitutionalized Elderly Population, by Disability Status: April 1984

Total

Persons with SubstantialFunctionalLimitations

Persons without SubstantialFunctionalLimitations

Total (thousands)

26,314

11,601

14,713

Percent Distribution by Program Combinations

Total Persons

100.0%

100.0%

100.0%

Social Security (SOC SEC)

92.6

92.9

92.3

SOC SEC only

74.0

66.2

80.1

SOC SEC & SSI

5.1

8.7

2.2

SOC SEC & food stamps

4.3

7.6

1.8

SOC SEC & AFDC

0.1^^

0.1^^

0.1^^

SOC SEC & cash welfare

0.3^^

0.6^^

0.1^^

SOC SEC & cash benefits

6.4

8.3

4.8

SOC SEC & in-kind

9.1

12.6

6.4

SSI, No SOC SEC

1.7

2.9

0.8

SSI & SOC SEC

5.1

8.7

2.2

SSI & SOC SEC only

1.7

3.0

0.7

SSI, SOC SEC & food stamps

2.3

4.0

1.0

SSI, SOC SEC & AFDC

0.1^^

0.1^^

0.1^^

SSI, SOC SEC & other welfare

0.1^^

0.2^^

---

SSI, SOC SEC & cash benefits

0.2^^

0.3^^

0.1^^

SSI, SOC SEC & in-kind

2.2

3.7

1.0

Food Stamps (FS) No SOC SEC, No SSI

0.1^^

0.3^^

0.0

Other Not Above

1.8

1.8

1.8

Other cash benefits

1.6

1.6

1.6

Other in-kind

0.3^^

0.3^^

0.3^^

None

3.8

2.1

5.1

Households above 1.5*poverty

3.0

1.4

4.2

Households below 1.5*poverty

0.8

0.7^^

0.9

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. ^^: Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

Most elderly individuals (74 percent) receive federal benefits from just one source--Social Security. Persons with substantial functional limitations, however, are somewhat more likely to receive some other form of federal assistance--66 percent of these individuals receive only Social Security. Those with substantial functional limitations often receive SSI, food stamps, other cash benefits, or other in-kind benefits in addition to Social Security.

Only a small group of elderly individuals do not receive Social Security (7 percent), and their participation in other programs does not appear to follow any overall pattern.

C. CHILDREN

The program participation of children younger than age 18, is examined for six programs: Social Security, AFDC, food stamps, other cash welfare, other cash benefits, and other in-kind benefits. Although some persons in this age group are covered under SSI, SIPP does not capture participation in this program among the young.

The programs that are most prevalent among children with disabilities are those that comprise the other in-kind benefit category (see Table IV.5). Forty percent of children younger than 18 with disabilities are covered under other in-kind benefits--predominantly free or reduced-price meals under the National School Lunch Program (see Appendix A). The Food Stamp and AFDC programs also serve relatively large portions of these children with disabilities (21 percent are covered under the Food Stamp Program, and 14 percent are covered under AFDC). About 9 percent of children with disabilities are covered under Social Security. The remaining programs provide benefits only to a small proportion (less than 2 percent) of the population of children with disabilities.

Compared with the total population younger than age 18, children with disabilities are more likely to participate in federal programs. Among all children, percent are covered under Social Security (versus 9 percent), 10 percent are covered under AFDC (versus 14 percent), 15 percent are covered under food stamps (versus 21 percent), and 27 percent are covered under other in-kind benefit programs (versus 40 percent). Except for Social Security, these rates reflect the relatively high rate of poverty among children with disabilities reported in Mathematica Policy Research, Inc. (1989).

Focusing on multiple program participation among children (Table IV.6), we see that more than two-thirds (68 percent) of all children are not covered by any of the federal programs studied here. Among children with disabilities, this percentage is close to 50 percent. In fact, 9 percent of children with disabilities and 11 percent of all children are in low-income households but do not receive federal assistance. These figures reflect 200 thousand children with impairments or 21 percent of the low-income children with impairments and 6.9 million children in total or 33 percent of children in low-income households. The gap in coverage for children in low-income households is of concern, especially since programs that are targeted toward children, such as AFDC, have been accounted for in this analysis.

TABLE IV.5: Percentage of Individuals Younger Than Age 18 Participating in Selected Government Programs, by Disability Status: April 1984

Total

Childrenwithout Disabilities

Childrenwith Disabilities

ChildrenwithPhysical Limitation

ChildrenwithMental/Emotional Limitation

Total Population (thousands)

62,501

60,175

2,326

1,411

1,131

Percent Participating In:

Social Security

3.4

3.2

8.6

6.2

10.8

AFDC

9.8

9.6

14.2

15.4

11.4

Food Stamp Program

14.8

14.6

20.7

21.8

19.4

Other cash welfare

1.6

1.6

1.9^^

1.9^^

1.9^^

Other cash benefits

0.8

0.8

1.0^^

0.6^^

1.4^^

Other in-kind benefits

27.0

26.5

39.5

38.7

41.8

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. ^^: Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

Other cash welfare includes cash welfare and other than AFDC and SSI.

Other cash benefits include benefits from the following programs: Railroad Retirement, Veterans Compensation and Pensions, Unemployment Compensation, Workers Compensation, and other temporary disability.

Other in-kind benefits include benefits received from the following programs: Public and Subsidized Housing, Energy Assistance, National School Lunch and Breakfast (free and reduced-price meals only), and WIC.

The multiple program combinations that dominate among children with disabilities involve in-kind benefits. Seventeen percent receive food stamps and other in-kind benefits only, and another 17 percent receive only other in-kind benefits.

The pattern of multiple program participation among all children is similar to the pattern observed for children with disabilities, in that the most frequent program combinations include in-kind benefits. However, the proportion of children who participate in these programs is less among the total population than it is among children with disabilities.

TABLE IV.6: Percentage of Individuals Younger Than Age 18 Participating in Multiple Government Programs Among the Noninstitutionalized Population, by Disability Status: April 1984

Total

Childrenwithout Disabilities

Childrenwith Disabilities

Total (thousands)

62,501

60,175

2,326

Percent Distribution by Program Combinations

Total Persons

100.0%

100.0%

100.0%

Social Security (SOC SEC)

3.4

3.2

8.6

SOC SEC only

1.7

1.5

4.8

SOC SEC & food stamps

0.6

0.5

2.0^^

SOC SEC & AFDC

0.1^^

0.1^^

---

SOC SEC & cash welfare

0.0

0.0

---

SOC SEC & cash benefits

0.2

0.2

0.4^^

SOC SEC & in-kind

1.5

1.4

3.6^^

Food Stamps (FS), No SOC SEC

14.2

14.0

18.7

FS only

0.8

0.8

0.4^^

FS & AFDC

8.3

8.2

11.4

FS & cash welfare

1.3

1.3

1.1^^

FS & cash benefits

0.1^^

0.1^^

---

FS & in-kind

12.1

11.9

17.1

AFDC & Not Above

1.3

1.2

2.9^^

AFDC only

0.5

0.5

1.1^^

AFDC & cash welfare

0.0

0.0

---

AFDC & in-kind

0.7

0.7

1.8^^

Other Not Above

13.2

13.0

17.7

Other cash welfare

0.3

0.3

0.8^^

Other cash benefits

0.5

0.5

0.6^^

Other in-kind

12.7

12.5

17.0

None

68.0

68.6

52.1

Households above 1.5*poverty

56.9

57.4

43.5

Households below 1.5*poverty

11.1

11.2

8.6

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. ^^: Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

The 14 programs discussed in the previous chapter provide cash, nutritional assistance, or housing subsidies. Public health insurance is an important in-kind benefit available to many elderly, disabled, or poor individuals. While a substantial proportion of individuals with disabilities are covered under public or private health insurance, 19 percent of the working-age population with substantial functional limitations and 17 percent of children with disabilities have no health insurance (Mathematica Policy Research, 1989). Among more severely disabled persons the source of health insurance is more likely to be Medicare or Medicaid than private insurance. The availability of public insurance to disabled persons who have little or no private insurance is important because they are more likely than their nondisabled peers to require health services. Furthermore, the availability of public insurance is linked to the participation of disabled persons in the federal assistance programs studied in the preceding chapter.

This chapter explores the WA between health insurance coverage under public and private plans and participation in the federal assistance programs. The analysis is divided into three sections, one for each of the age groups examined previously. In summary, we find that:

Working-age adults with disabilities who participate in selected programs that are not targeted to the disabled (other Social Security, other cash, and other in-kind benefit programs) are less likely to have private Insurance and are more likely to have public insurance than are others who participate in these programs.

As expected, working-age participants in SSDI, SSI, and AFDC programs are more likely to have health insurance coverage and are more likely to be covered under public insurance than is the total population, regardless of the presence of a disability.

Virtually all elderly individuals have health insurance coverage, primarily through the Medicare program. Elderly Social Security participants with substantial functional limitations rely more heavily on Medicaid as a supplement to Medicare than does the total population of elderly Social Security participants, due to their increased risk of living at or near the poverty line.

Health insurance coverage among children varies according to their participation in federal assistance programs and their disability status. Children with disabilities who participate in need-tested programs tend to rely on Medicaid, while participants in the other programs tend to have private health insurance. In comparison with the total population, children with disabilities are proportionately less likely to have private health insurance.

A. WORKNG-AGE POPUIATION

Given that the federally subsidized income security system includes Medicare and Medicaid, it is not surprising that the federal transfer programs analyzed previously and the public health insurance programs overlap considerably. However, these interactions differ for persons ages 18 to 64 with substantial functional limitations from those for all persons in that age group. In addition, the patterns observed for persons who are prevented from working are very similar to those observed for persons with a substantial functional limitation. Below, we first discuss the interaction between health insurance coverage and the federal assistance programs among the working-age population with substantial functional limitations, and compare that with the corresponding interaction among persons prevented from working. The final section illustrates differences in the interaction of health insurance coverage and federal assistance program participation across persons with substantial functional limitations and the total population.

1. Working-Age Population with Substantial Functional Limitations

Earlier, we noted that about half of all working-age adults with substantial functional limitations and one fourth of those in low-income households do not receive assistance from the federal government. Table V.1 shows that while more than 80 percent of those individuals have private insurance, almost none haw public insurance and 16 percent have no insurance coverage at all. Hence, 7 percent of the population with substantial functional limitations do not receive assistance from the federal government and have no health insurance coverage. Among the low-income population with substantial functional limitations who do not receive federal assistance, more than one-third (38 percent) have no health insurance coverage. Thus, 9 percent of the entire low-income population with substantial functional limitations do not receive federal assistance and are not covered by health insurance.

While all disabled workers, disabled adults, and disabled widows and widowers over age 50 who receive Social Security benefits are eligible for Medicare, there is a two-year waiting period after they first receive Social Security benefits until their eligibility becomes effective. Hence, we do not expect to see universal Medicare coverage among SSDI recipients. Table V.1 shows that two-thirds of the individuals with substantial functional limitations who are covered under SSDI report receiving Medicare (37 percent have Medicare but no private insurance, and 31 percent have Medicare in conjunction with private insurance). This estimate seems low in light of the relationship between these two programs.

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4.^^: Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

Twenty percent of those with substantial functional limitations who receive SSDI also have Medicaid coverage. Most (13 of 20 percent) of those covered under Medicaid also have Medicare, and, hence, are poor or medically needy recipients of Social Security benefits. Six percent of the SSDI participants are covered under Medicaid but not covered under Medicare and are presumably in the waiting period for that program. Almost one of ten (9 percent) of SSDI recipients with substantial functional limitations have no health insurance coverage.

Although other Social Security participants younger than age 65 are not entitled to Medicare, Table V.1 shows that a small proportion of those with substantial functional limitations report Medicare coverage (5 percent as a supplement to private insurance, and 1 percent as the sole source of coverage).27 The remainder of this group is covered predominantly by private insurance (60 percent have only private insurance, and 5 percent report Medicare supplemented with private insurance). However, a significant proportion do not have any health insurance coverage (29 percent).

Although the program regulations do not guarantee universal health insurance coverage among recipients of means-tested transfers, SIPP estimates imply that all SSI and AFDC participants with substantial functional limitations are covered under public health insurance. A relatively small proportion (12 percent of SSI participants and 8 percent of AFDC participants) report private insurance, but all receive Medicaid. Almost one-third (30 percent) of the SSI participants and 5 percent of AFDC participants are covered under Medicare as well. The estimates for Medicaid coverage are surprising, given that eligibility for Medicaid is not automatic among SSI participants; some states require a separate application for Medicaid benefits, and others impose more restrictive eligibility criteria.28

Food stamp and other cash welfare participants ages 18 to 64 with substantial functional limitations have very little private insurance (8 percent of food stamp participants have only private insurance, and 4 percent receive public and private insurance; 3 percent of other cash welfare participants have only private insurance). Over two-thirds of the participants in either program (69 percent for food stamps and 70 percent for other cash welfare) are covered under public insurance--predominately Medicaid--and over one-fourth have no insurance coverage at all.

About half (53 percent) of the persons with substantial functional limitations who receive other cash benefits have private insurance, while 19 percent have Medicare. Almost one-third (31 percent) of recipients of other cash benefits have no health insurance.

Persons with substantial functional limitations who receive other in-kind benefits are more h1mly to be covered under private insurance than those with substantial functional limitations who participate in the Food Stamp Program. One in five of other in-kind benefit recipients have private insurance only (versus 8 percent of food stamp recipients), and 5 percent have private and public insurance (versus 4 percent). Recipients of other in-kind benefits are less likely to be covered under Medicaid as well.

2. Persons Prevented from Working

The patterns of health insurance coverage among program participants who are prevented from working are similar to the patterns among program participants with substantial functional limitations, although the rates of private health insurance coverage and of any coverage differ for some program participants. The proportions of persons prevented from working who have only private insurance are as follows: 31 percent of recipients of other cash benefits, 12 percent of recipients of other in-kind benefits, and 75 percent of persons who do not participate in any of the federal assistance programs (Table V.2). In contrast corresponding percentages for persons with substantial functional limitations are 45, 20, and 82 percent.

The proportion of persons with no health insurance varies by type of limitation (functional versus work) for recipients of food stamps, other cash welfare, other cash benefits, and other in-kind benefits, as well as for persons who do not participate in federal assistance programs. However, the variation is not consistent across programs. Among recipients of food stamps and of other in-kind benefits, lower proportions of persons with no health insurance are observed among those prevented from working than among those with substantial functional limitations, but among the recipients of other cash benefits and persons who do not participate in any program, higher rates of the lack of health insurance coverage are observed for this group.

3. The Total Working-Age Population

Mathematica Policy Research (1989) reports that working-age adults at most levels of limitations in functioning have about the same likelihood of being covered under health insurance as does the total population, although the mix between public and private insurance differs between the two groups. In addition, Table V.1 shows that the interaction between health insurance and non-health insurance programs is similar among the working-age population with substantial functional limitations and the working-age population in general. Overall, the total population relies more heavily on private, health insurance than does the population with substantial functional limitations. Over three-fourths of the total working-age population have only private health insurance, compared with 52 percent of those with substantial functional limitations. However, among participants in the noninsurance programs studied here, the presence of a substantial functional limitation is not associated with a large difference in health insurance coverage.

TABLE V.2: Health Insurance Coverage of Working-Age Adults Who are Participants in Federal Assistance Programs and are Prevented from Working: April 1984

Total (thousands)

Percent Distribution by Type of Health Insurance

Total

Private Insurance Only

Public Insurance Only

Public and Private Insurance

No Health Insurance

Medicare Only

Medicaid Only

Both

Medicare Only

Medicaid Only

Both

Persons Who Are Unable To Work

8,025

100.0%

35.1%

8.5%

19.4%

5.2%

10.8%

2.1%

0.5%^^

18.5%

Persons Participating in:

SSDI

2,768

100.0

17.6

23.5

6.0

12.6

28.6

1.7^^

0.9^^

9.3

Other Social Security

658

100.0

57.8

2.0^^

5.4^^

0.6^^

8.2

---

---

25.9

SSI

1,213

100.0

---

---

64.9

25.2

---

7.8

2.1^^

---

AFDC

508

100.0

---

---

83.2

7.2^^

---

8.9^^

0.8^^

---

Food Stamp Program

1,627

100.0

4.8^^

3.4^^

56.9

11.1

1.4^^

4.5^^

0.3^^

17.5

Other Cash Welfare

245

100.0

1.8^^

---

68.3

7.9^^

---

0.8^^

--

21.2

Other Cash Benefits

997

100.0

30.5

12.9

4.8^^

1.0^^

13.7

0.5^^

0.9^^

35.7

Other In-Kind Benefits

2,089

100.0

11.7

7.1

43.3

10.8

2.8^^

3.3^^

0.6^^

20.3

None

2,054

100.0

74.6

0.6^^

1.9^^

0.3^^

0.7^^

0.2^^

---

21.6

Household income above 105 percent of poverty

1,479

100.0

82.0

---

2.4^^

---

0.9^^

0.3^^

---

14.3

Household income below 150 percent of poverty

575

100.0

55.6

2.2^^

0.7^^

1.1^^

---

---

---

40.4

Total Working-Age Population

143,357

100.0

77.3

0.6

4.2

0.3

0.8

0.6

0.1

16.2

Persons Participating in:

SSDI

3,142

100.0

17.3

23.2

6.7

1.9

27.3

1.8^^

1.5^^

10.4

Other Social Security

4,239

100.0

70.5

0.9^^

2.1

0.1^^

4.5

0.3^^

---

21.6

SSI

1,660

100.0

---

---

64.6

19.6

---

12.6

3.1^^

---

AFDC

3,702

100.0

---

---

88.0

1.1^^

---

10.7

0.2^^

---

Food Stamp Program

8,346

100.0

13.1

0.9^^

50.4

2.3

0.3^^

3.5

0.1^^

29.4

Other Cash Welfare

1,415

100.0

7.8

---

65.8

1.7^^

---

2.6^^

---

22.1

Other Cash Benefits

5,842

100.0

59.4

2.5

3.0

0.2^^

2.8

0.3^^

0.2^^

31.6

Other In-Kind Benefits

16,437

100.0

40.9

1.0

24.4

1.4

0.4^^

2.3

0.1^^

29.3

None

113,052

100.0

86.1

0.0

0.3

0.0

0.1

0.1

0.0

13.5

Household income above 105 percent of poverty

99,655

100.0

89.6

0.0

0.1

---

0.1

0.1

0.0

10.2

Household income below 150 percent of poverty

13,398

100.0

60.4

0.2^^

1.3

0.0

0.1^^

0.1^^

---

37.9

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4.^^: Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

B. THE ELDERLY

Virtually all elderly individuals are covered under health insurance, primarily Medicare.29 Elderly persons are automatically eligible for Medicare if they receive Social Security or railroad retirement benefits (which most do), and others may elect to participate as long as they pay a premium. Hence, in this section, we first focus on the extent to which elderly persons are covered under Medicaid as well as Medicare, and then focus on the extent to which persons supplement Medicare with private health insurance (see Table V.3). The section concludes with a comparison between persons with substantial functional limitations and the total population.

1. Medicare and Medicaid Coverage Among the Elderly with Substantial Functional Limitations

More than one in ten (14 percent) of the elderly population with substantial functional limitations are covered under Medicaid and Medicare. This proportion is much higher among recipients of SSI benefits (92 percent), since most of these recipients are automatically eligible for Medicaid. It is also higher among participants in other means-tested programs. In fact, among persons with substantial functional limitations, at nearly two-thirds of Food Stamp participants (64 percent) and one-third (38 percent) of other in-kind benefit program participants are covered under both Medicare and Medicaid. On the other hand, the proportion is lower among Social Security recipients (13 percent) and among other cash benefit recipients (7 percent).

As noted earlier, SIPP reports that all persons with substantial functional limitations who receive SSI are covered under Medicaid. A small proportion of these individuals are not covered under Medicare (8 percent), corresponding to the small proportion of persons who have SSI but no Social Security (3 percent, as shown in Chapter IV). Such individuals are likely not to be eligible for Medicare and are too poor to pay Medicare premiums.

A small proportion of elderly individuals with substantial functional limitations do not participate in the federal assistance programs examined here. None of these individuals has Medicaid coverage, either singly or in combination with Medicare.

Joint Medicare and private health insurance coverage is fairly widespread among all program participants, with the exception of those receiving SSI or food stamps. Sixty-six percent of Social Security participants are covered under both Medicare and private insurance, as are 58 percent of other cash benefit recipients, 43 percent of other in-kind benefits recipients, and 40 percent of those who do not participate in any of the programs. Coverage under private insurance only is virtually nonexistent among participants in all of these programs.

Joint Medicare and private health insurance coverage occurs less frequently among participants in programs which serve the poor--SSI and food stamps--due presumably the lack of funds to purchase supplemental insurance but perhaps also to the lack of private health insurance through a retirement plan. The proportions who have joint public and private insurance are 12 percent and 20 percent, respectively, among elderly SSI and food stamp recipients with substantial functional limitations.

Persons who do not receive any of the federal assistance programs have a relatively high rate of participation in private plans only (29 percent) and of participation in both Medicare and private plans (40 percent). Fifteen percent have no health insurance coverage--a considerably higher percentage than the percentage for the total population with substantial functional limitations or participants in any of the programs in Table V.3.

3. The Total Elderly Population

The rate of coverage under Medicare is essentially the same among elderly persons with substantial functional limitations as it is among the total population of elderly. This is due in large part to the fact that participants in the Social Security program constitute a substantial majority of the elderly population. However, elderly persons with substantial functional limitations are less likely to supplement their Medicare coverage with private health insurance than is the total elderly population. Among the total population, 27 percent of Social Security participants are covered under Medicare but have no private insurance, compared with 34 percent of Social Security participants with substantial functional limitations.

The proportion of the elderly covered under both Medicaid and Medicare but not under private insurance also differs between the population with substantial functional limitations and the total population. This difference occurs largely among recipients of Social Security (10 percent of those with substantial functional limitations, compared with 6 percent of the total population, have both Medicaid and Medicare coverage but not private insurance).

C. CHILDREN

Health insurance coverage among children varies according to their participation in other federal programs and their disability status. Medicaid provides most of the health insurance coverage among children with disabilities who participate in the AFDC, Food Stamp, and other in-kind benefits programs, while private health insurance is a significant factor among children with disabilities who participate in Social Security. In comparison with the total population of children, children with disabilities have proportionately less private health insurance. Below, we discuss the patterns of health insurance coverage for children with disabilities and for all children.

1. Health Insurance Coverage of Children with Disabilities

Mathematica Policy Research (1989) asserted that most children both with and without disabilities are covered under private insurance only. Furthermore, 20 percent of those with disabilities and 12 percent of all children are covered under Medicaid only, and relatively few have both Medicaid and private insurance (4 percent of those with disabilities and 1 percent of the total population younger than age 18). The remainder (17 percent of those with disabilities and 17 percent of the total population) have no health insurance.

In contrast, children with disabilities who participate in AFDC and the Food Stamp Program rely heavily on Medicaid (Table V.4), which constitutes a major source of health insurance coverage among children in poverty (Mathematica Policy Research, 1989). Just under 90 percent of children with disabilities who receive AFDC have only Medicaid, and the remainder have Medicaid and private insurance. Two-thirds of the food stamp participants with disabilities have only Medicaid coverage, while 6 percent have both Medicaid and private insurance. Surprisingly, 24 percent of children with disabilities who receive food stamps have no health insurance coverage. These are children in low-income households who do not participate in AFDC. Their nonparticipation in AFDC might be a matter of choice, but it is more likely that such children reside in households whose family composition, income, or assets do not meet AFDC eligibility standards, but their household income and assets do not exceed food stamp eligibility standards. Consequently, they are also not eligible for Medicaid.

Children with disabilities who participate in Social Security and other in-kind benefit programs are more likely to have private health insurance coverage than children who are participants in other programs. Over half (56 percent) of the children who receive Social Security and 28 percent of children who receive other in-kind benefits have only private insurance. A small proportion have both Medicaid and private health insurance (2 percent of children who receive Social Security, and 9 percent who receive other in-kind benefits). Nonetheless, even though these children have more private insurance coverage than do other children with disabilities, they do not have proportionately more health insurance coverage in total. About one of four (27 percent of children who receive Social Security and 24 percent of children who receive other in-kind benefits) haw no health insurance coverage, compared with 17 percent all children with disabilities. Again, such children are likely to be part of families whose income and assets exceed AFDC eligibility standards.

More than 4 of 5 (85 percent) of children with disabilities who have no other assistance from the federal government have private insurance and no Medicaid. However, 13 percent have no health insurance coverage at all. Thus 157,000 children, or 7 percent of those with disabilities, do not receive assistance from the federal government of any kind. Those in low-income households are less likely to have health insurance coverage than those in higher-income households.

2. All Children

In comparison with the total population younger than age 18, children with disabilities are morelikely to be covered under Medicaid and less likely to be covered under private health insurance. However, sample size restrictions prohibit comparisons of health insurance coverage of program participants between children with disabilities and the total population under age 18. Except for children covered under other in-kind benefits, the differences observed in Table V.4 are not significant.

TABLE V.4: Health Insurance Coverage of Persons Younger Than Age 18 Who are Participants in Federal Assistance Programs, by Disability Status: April 1984

Total (thousands)

Percent Distribution by Health Insurance Coverage

Total

Private Only

Medicaid Only

BothMedicaid and Private Insurance

Neither

Children with Impairments

2,326

100.0%

60.4%

18.5%

4.6%

16.6%

Persons Participating in:

Social Security

200

100.0

56.2

15.2^^

2.0^^

26.6^^

AFDC

331

100.0

---

88.9

11.1^^

---

Food Stamp Program

482

100.0

4.7^^

65.9

5.8^^

23.5

Other In-Kind Benefits

918

100.0

27.6

40.3

8.5^^

23.6

None

1,213

100.0

85.4

0.9^^

1.2^^

12.5

Household income above 105 percent of poverty

1,013

100.0

90.6

0.3^^

0.4^^

8.7

Household income below 150 percent of poverty

200

100.0

59.2

4.1^^

5.1^^

31.7

Total Persons Younger Than Age 18

62,501

100.0

69.8

11.8

1.2

17.2

Persons Participating in:

Social Security

2,104

100.0

54.0

8.8

1.4^^

35.7

AFDC

6,096

100.0

---

93.2

6.8

---

Food Stamp Program

9,249

100.0

9.1

64.6

3.9

22.4

Other Cash Welfare

1,017

100.0

5.7^^

80.3

3.1^^

10.9

Other Cash Benefits

496

100.0

66.4

8.6^^

---

25.0

Other In-kind Benefits

16,869

100.0

34.9

35.5

2.9

26.7

None

42,483

100.0

86.1

0.4

0.3

13.1

Household income above 105 percent of poverty

35,564

100.0

90.6

0.1^^

0.3

9.1

Household income below 150 percent of poverty

6,920

100.0

63.1

2.1

0.6^^

34.2

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. ^^: Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

The SSI program is targeted not only toward the elderly population, but also toward disabled individuals younger than age 65, and it conditions eligibility on financial need (in addition to age and disability status). Participation in the program requires individuals to apply for benefits and meet eligibility requirements associated with other means-tested or welfare programs. Thus, it is helpful to examine the SSI program participation behavior of eligible individuals as a measure of program success. We should note that the nonparticipation of SSI-eligible individuals can be due to a number of factors in addition to a desire not to receive assistance. Such factors include an ignorance about the program, a lack of awareness about their eligibility, and physical barriers to participation. To the extent that SSI participation is affected by ignorance about the program or eligibility status, outreach efforts can enhance participation levels. However, other factors that affect participation cannot be resolved as easily.

In this chapter we compute participation rates in the federal SSI program among persons simulated to be eligible for that program and array these rates by levels of limitations in functioning. Individuals eligible for or participating in state-administered SSI programs who are not eligible for or are not participating in the federal SSI program are excluded from this analysis because they are not captured explicitly in SIPP.30 Furthermore, because this analysis is based on survey data-as a source for both the number of eligibles and the number of participants--the overall participation rate is subject to bias. Problems such as the underreporting of participation and the underreporting of income tend to bias the estimates of participation rates downward. Furthermore, as discussed in more detail below, we are restricted in this analysis to examining participants who report income and assets which meet the SSI eligibility guidelines. On the other hand, methods used by the Census Bureau to impute information in cases of nonresponse may have the opposite affect, because the procedures tend to overestimate missing income among program participants (see Doyle and Dalrymple, 1987). For a more in-depth discussion of the problems that affect estimating participation rates with survey data, the reader should refer to Bartolomei-Hill (1989) and Doyle and Beebout (1989).

This chapter consists of three sections. The first section provides an overview of the procedures used to compute federal SSI participation rates. The second section provides our estimates of participation rates among the working-age and elderly populations. The last section provides more detailed information on participation patterns among the working-age population.

In summary we find that the proportion of the disabled individuals who participate in the SSI program appears low in comparison to the number who are apparently eligible:

The overall participation rate for working-age adults is estimated to be 38 percent.

The participation rates for the working-age population do not increase wIth the severity of the limitation although they are higher for persons who need assistance with ADLS (57 percent) than they are for other individuals in this age group.

The rates for the elderly are higher with a 50 percent overall participation rate and the rates increase with the severity of the limitation.

A. DETERMINING FEDERAL SSI PARTICIPATION RATES

Participation rates are computed as the ratios of eligible participants to eligible individuals and are arrayed by level of limitation in functioning. Eligibility is simulated for each person age 18 and older based on a three-step process. We first determine potential eligibility according to age and disability status. Persons ages 65 and older regardless of disability status and persons ages 18 to 64 who meet certain disability criteria are considered potentially eligible. The following individuals are deemed to meet the disability criteria for SSI eligibility: working-age adults whose average monthly earnings in the period November 1983 through March 1984 fell below $300 and whose health condition rendered them unable to work or able to work only part-time or irregularly, working-age adults who are classified as receiving disability benefits under the Social Security or Veterans' programs, and working-age adults that report receiving SSI benefits.

In the second step of the process, we construct countable income and assets for each potentially eligible individual following program rules as closely as we can within the constraints of the data. And, third, we compare countable income and assets with the limits established by the Social Security Administration in April 1984. In states whose state supplementation component is administered by the federal government the income limits (or guarantees) are inclusive of the state component. However, in states whose supplementation component is state-administered, only the federal guarantee is used.31 Disabled individuals who meet all financial requirements are deemed eligible for the program, and their potential benefits are computed according to program rules.

In some instances, an individual reports participation in SSI but reports income and/or assets which exceed the limits set by the program.32 These cases have been deleted from the numerator because the inconsistency prevents an appropriate accounting of these persons in the denominator.

The estimates of participation rates among the working-age population are sensitive to the definition of disability status used for the SSI program. SIPP does not permit a perfect analysis of this measure of disability since it does not determine if the respondent has an inability to engage in any substantial gainful activity by reason of any medically determined physical or mental impairment which be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months. Instead, we base the determination of disability status on self-reported work limitations and average earnings over the previous six months (except where a working-age adult reports receiving disability benefits). The period which earnings are examined is short relative to the disability criteria established for the SSI program and thus more persons may appear to be disabled than actually are. On the other hand, it is expected that the SIPP data may reflect underreporting of the presence of work limitations or inabilities to work, which would have the opposite effect. In surveys which rely on self-reported health status, researchers have found that persons tend to underreport the presence and severity of health conditions. Furthermore, answers to questions on limitations in employment ability may be influenced by the subjectivity of respondents (Mathematica Policy Research, 1989).

However, while the disability the measure employed for is purpose may result in estimation of overall participation rates that may be too, low the relative difference in rates across subgroups are not likely to be affected.

B. PARTICIPATION RATES AMONG THE ELIGIBLE WORKING-AGE AND ELDERLY POPULATIONS

Overall, participation rates in the SSI program are 38 percent for eligible individuals ages 18 to 64 and 50 percent for persons ages 65 and older (see Table VI.1). Estimates of participation rates among the working-age population presented here are lower than estimates reported in Zedlewski and Meyer (1989). Zedlewski and Meyer estimate rates of 55 percent for disabled individuals and 63 percent for disabled couples based on information from the March 1984 Current Population Survey. Estimates of participation rates among the elderly are lower than the rates published in Leavitt and Schulz (1988), but they generally agree with the rates published in other studies based on nationally representative surveys.33 Leavitt and Schulz (1988) estimate a high participation rate among the elderly (64 percent) primarily because they simulate a significantly lower number of eligible persons (2.8 million persons in August 1984). It is unclear why the Leavitt and Schultz estimate of eligibles differs so much from the estimate reported in Table VI.1.

TABLE VI.1: SSI Participation Rates Conditional on Eligibility, by Limitations in Functioning and Age: April 1984

The number of participants excludes those participants who are not counted as eligible for SSI.

Participation rates among persons ages 18 to 64 do not exhibit a pattern of an increase in participation as the severity of disability increases, which is surprising. In fact, the participation rate among those with substantial functional limitations (36 percent) does not exceed the rate of persons with one difficulty but no inabilities and no need for assistance with ADLs or IADLs, or the rate of persons with no limitations in functioning. There is a relatively high rate of participation among working-age persons who need assistance with ADLs (57 percent). We examine participation rates among the working-age population further in the next section.

Among the elderly, participation rates increase as the severity of the limitation in functioning increases, ranging from 37 percent among persons with no limitations in functioning to 59 percent among persons who need assistance with IADLs but not ADLs, and to 58 percent among persons who need assistance with ADLs but not IADLs. Overall, elderly persons with a substantial functional limitation participate at a rate of 56 percent, 16 points higher than persons who have difficulty in one function but no inabilities and who do not need assistance with ADLs or IADLs.

C. PARTICIPATION RATES AMONG THE WORKING-AGE POPULATION BY SELECTED CHARACTERISTICS

In this section we pursue the unexpected finding that participation rates among the working-age eligible population do not increase as the severity of limitation in functioning increases. We first examine the interaction between limitations in functioning and work limitations as delineated in Mathematica Policy Research (1989), since eligibility for SSI is tied to the ability to work. We then proceed analyze participation rates by sex, race and ethnicity, and benefit levels.

Mathematica Policy Research (1989) found that the proportion of individuals who are prevented from working declines as the severity of the limitation in functioning declines. However, the size of the population of persons prevented from working increases as the severity of the disability declines, and thus the absolute number of persons with a limitation in functioning who are prevented from working increases as the severity of the limitation declines. Not surprisingly, a similar pattern emerges when we consider the distribution of SSI-eligibles by the severity of the limitation in functioning.34

Federal SSI participation rates among the working-age population do not vary by sex, and vary little by race and ethnicity. Both males and females participate at a rate of 38 percent while white non-Hispanic individuals participate at a slightly lower rate (36 percent), and black non-Hispanic individuals participate at a slightly higher rate--44 percent (see Table VI.2). These patterns are not as striking as the patterns observed among the elderly (Leavitt and Schul7, 1988). However, as pointed out in Bartolomei-Hill (1989), it should be noted that the differences in participation rates by race and ethnicity reflect differences in the underlying characteristics that are associated with race and ethnicity, rather than the race and ethnic classification itself.

TABLE VI.2: Participation Rates Among the SSI-Eligible Population Ages 18 to 64, by Selected Demographic Characteristics: April 1984

Number of Participants excludes those participants who were not counted as eligible for SSI.

Federal SSI participation rates by benefit level are analyzed by examining the benefit participation rate among the working-age population (see Table VI.3). The benefit rate is the ratio of benefits paid to participating individuals to benefits that would have been paid had all eligible individuals participated. This rate indicates the effectiveness of the SSI program at meeting the needs of the target population. Table V.3 illustrates that 46 percent of the eligible benefits were paid to disabled individuals who participated in the federal SSI program. Therefore, individuals eligible for higher benefits participated at a higher rate than did individuals who were entitled to lower benefits. The benefit rates vary by the level of limitation in functioning in the same manner as do the individual participation rates. The highest rate is observed for persons who need assistance with ADLs, but, otherwise, persons with substantial functional limitations participate at a lower rate than do both persons with no limitations in functioning and persons with a limitation in one function but no inabilities and no need for assistance with ADLs or IADLs. Thus, while the participation rates do not increase as the severity of the limitation increases, we do see that benefits are being issued to those who are entitled to higher payments and thus who have greater need of them.

TABLE VI.3: Benefit Participation Rates in SSI Among the Working-Age Population Ages 18 to 64, by Limitations in Functioning: April 1984

Program participation in and of itself does not guarantee a decent standard of living. Similarly, persons who participate in multiple programs are not necessarily better off than persons who participate only in one program. The extent to which the needs of individuals are met by the federal government is a function of both their level of need and the size of the combined benefits available to them.

In this chapter we explore the extent to which the federal cash assistance programs analyzed in the preceding chapters alleviate need, as measured by the ratio of monthly income to poverty. We first examine an income-to-needs ratio computed on the basis of household pretransfer income (i.e., the ratio of household cash income to poverty excluding public transfers and means-tested cash transfers). We then examine how that ratio is affected as we increment household cash income with benefits from one program at a time in the following sequence: Social Security, other public transfers, SSI, AFDC, and other cash welfare. In order to assess the impact of food stamps on the population with disabilities, we also compute a ratio of monthly cash income plus food stamps to poverty.35, 36

The analysis is restricted to persons in households whose pretransfer income falls below 250 percent of poverty. The following terms are used in the discussion:

Near Poor -- Persons in households whose income is between 100 and 150 percent of poverty

Below-Moderate Income Group -- Persons in households whose income is between 150 and 250 percent of poverty

Moderate-Income Group -- Persons in households whose income exceeds 250 percent of poverty

In summary we find:

While the income support programs in combination are successful in moving many disabled individuals above the poverty line, a substantial portion remain in poverty.

Cash assistance and food stamps combined are more effective at reducing poverty among the working-age population with a substantial functional limitation than they are among the total working-age population.

Social Security benefits are very effective at moving working-age persons out of poverty. Furthermore, they have a proportionately larger impact on the working-age population with a substantial functional limitation than they do on the total working-age population Social Security, SSI, AFDC, and food stamps are important in moving persons from below to above half the poverty line.

More than half of elderly individuals in very poor households and over 95 percent of those in moderately poor households are removed from poverty from receiving Social Security benefits.

Proportionately fewer elderly individuals with a substantial functional limitation are removed from poverty from receiving federal cash resistance and food stamps than is true of the total elderly population.

Federal assistance programs are not as effective at removing children from poverty as they are the other two age groups regardless of disability status. Over 80 percent of all children in very poor households and 32 percent of all children in moderately poor households remain in poverty even after they receive federal cash assistance and food stamps. Slightly more of those with impairments are removed than is true for their counterparts in the total population, but the difference is not significant.

A. WORKING-AGE ADULTS

We have arrayed the working-age population by the pretransfer income ratio and a series of post-transfer income ratios, each computed by incrementing household income in the previous ratio by a specified income type (see Table VII.1 and Table VII.2). The first ratio is computed by adding Social Security to pretransfer income. The working-age population is subdivided into four groups according to the ratio of pretransfer income to poverty: very poor, moderately poor, near poor, and below moderate income. The impact of federal assistance payments on the poverty level is examined separately for each group.

TABLE VII.1: The Impact of Transfer Payments on the Economic Well-Being of Persons Ages 18 to 64 with Substantial Functional Limitations

Pretransfer Income Classification

Total (thousands)

Post-Transfer Poverty Ratio*

Total

0-50%

51-100%

Subtotal BelowPoverty

101-150%

151-250%

251% and Higher

Subtotal AbovePoverty

Very Poor: Pretransfer Income 0-50% of Poverty

3,600

Pretransfer + Social Security

100.0%

57.6%

22.9%

80.6%

14.8%

4.6%

---

19.4%

Pretransfer + nonmeans-tested transfers

100.0

50.3

22.7

73.1

17.7

7.1

2.1%^^

26.9

Pretransfer + nonmeans-tested transfers + SSI

100.0

36.1

30.9

67.0

22.3

8.5

2.2^^

33.0

Pretransfer + nonmeans-tested transfers + SSI + AFDC

100.0

29.9

35.2

65.1

24.2

8.4

2.3^^

34.9

All Cash Income

100.0

27.3

37.4

64.7

24.4

8.5

2.3^^

35.3

All Cash Income + food stamps

100.0

18.4

44.0

62.4

25.7

9.5

2.3^^

37.6

Moderaterly Poor: Pretransfer 51-100% of Poverty

1,310

Pretransfer + Social Security

100.0

---

50.0

50.0

15.9

31.1

3.1^^

50.0

Pretransfer + nonmeans-tested transfers

100.0

---

44.5

44.5

16.6

33.4

5.6^^

55.5

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

41.0

41.0

17.8

35.6

5.6^^

59.0

Pretransfer + nonmeans-tested transfers + SSI + AFDC

100.0

---

38.3

38.3

20.2

35.9

5.6^^

61.7

All Cash Income

100.0

---

37.6

37.6

20.5

36.3

5.6^^

62.4

All Cash Income + food stamps

100.0

---

33.4

33.4

24.0

37.0

5.6^^

66.6

Near Poor: Pretransfer 101-150% of Poverty

1,059

Pretransfer + Social Security

100.0

---

---

---

59.1

32.5

8.4

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

54.4

35.2

10.5

100.0

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

---

---

50.9

38.7

10.5

100.0

Pretransfer + nonmeans-tested transfers + SSI + AFDC

100.0

---

---

---

48.6

40.9

10.5

100.0

All Cash Income

100.0

---

---

---

47.6

41.9

10.5

100.0

All Cash Income + food stamps

100.0

---

---

---

47.4

42.1

10.5

100.0

Below-Moderate Income: Pretransfer 151-250% of Poverty

2,227

Pretransfer + Social Security

100.0

---

---

---

---

77.5

22.5

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

---

72.7

27.3

100.0

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

---

---

---

70.5

29.5

100.0

Pretransfer + nonmeans-tested transfers + SSI + AFDC

100.0

---

---

---

---

70.0

30.0

100.0

All Cash Income

100.0

---

---

---

---

70.0

30.0

100.0

All Cash Income + food stamps

100.0

---

---

---

---

69.8

30.2

100.0

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. --- Not Applicable * Computed as the ratio of pretransfer household income plus the transfer payments listed for each row divided by the monthly poverty level. ^^ Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

TABLE VII.2: The Impact of Transfer Payments on the Economic Well-Being of All Persons Ages 18 to 64

Pretransfer Income Classification

Total (thousands)

Post-Transfer Poverty Ratio*

Total

0-50%

51-100%

Subtotal BelowPoverty

101-150%

151-250%

251% and Higher

Subtotal AbovePoverty

Very Poor: Pretransfer Income 0-50% of Poverty

14,565

Pretransfer + Social Security

100.0%

75.3%

13.4%

88.8%

7.9%

3.3%

---

11.2%

Pretransfer + nonmeans-tested transfers

100.0

63.8

16.9

80.6

12.1

6.0

1.3%

19.4

Pretransfer + nonmeans-tested transfers + SSI

100.0

57.1

21.2

78.3

13.8

6.6

1.3

21.7

Pretransfer + nonmeans-tested transfers + SSI + AFDC

100.0

46.9

29.7

76.6

15.2

6.9

1.3

23.4

All Cash Income

100.0

44.6

31.7

76.3

15.4

7.0

1.3

23.7

All Cash Income + food stamps

100.0

32.2

41.7

73.9

17.4

7.4

1.3

26.1

Moderaterly Poor: Pretransfer 51-100% of Poverty

8,717

Pretransfer + Social Security

100.0

---

74.7

74.7

10.1

14.3

0.9^^

25.3

Pretransfer + nonmeans-tested transfers

100.0

---

67.6

67.6

13.2

17.0

2.1

32.4

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

65.6

65.6

13.7

18.6

2.1

34.4

Pretransfer + nonmeans-tested transfers + SSI + AFDC

100.0

---

61.5

61.5

17.5

18.9

2.1

38.5

All Cash Income

100.0

---

60.8

60.8

18.0

19.1

2.1

39.2

All Cash Income + food stamps

100.0

---

56.6

56.6

21.9

19.4

2.1

43.4

Near Poor: Pretransfer 101-150% of Poverty

11,529

Pretransfer + Social Security

100.0

---

---

---

82.7

14.8

2.5

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

75.9

20.4

3.7

100.0

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

---

---

74.3

21.8

4.0

100.0

Pretransfer + nonmeans-tested transfers + SSI + AFDC

100.0

---

---

---

73.0

23.0

4.0

100.0

All Cash Income

100.0

---

---

---

72.5

23.6

4.0

100.0

All Cash Income + food stamps

100.0

---

---

---

71.6

24.4

4.0

100.0

Below-Moderate Income: Pretransfer 151-250% of Poverty

28,656

Pretransfer + Social Security

100.0

---

---

---

---

90.9

9.1

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

---

87.5

12.5

100.0

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

---

---

---

87.0

13.0

100.0

Pretransfer + nonmeans-tested transfers + SSI + AFDC

100.0

---

---

---

---

86.6

13.4

100.0

All Cash Income

100.0

---

---

---

---

86.5

13.5

100.0

All Cash Income + food stamps

100.0

---

---

---

---

86.34

13.6

100.0

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. --- Not Applicable * Computed as the ratio of pretransfer household income plus the transfer payments listed for each row divided by the monthly poverty level. ^^ Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

1. Very Poor, Based on Pretransfer Income

Over one-third of the individuals with substantial functional limitations in very poor pretransfer households are lifted out of poverty by the combination of all cash transfers and food stamps (see Table VII.1). Just under half (44 percent) of the individuals in the lowest pretransfer income class are still below poverty, but their incomes rise to 50 percent of the poverty line after all transfers and food stamps are counted. However, one-fifth of the working-age population with substantial functional limitations remain very poor even after receiving assistance from the federal government.

The incremental effect of federal assistance programs on poverty status varies by program, with the major impact coming from Social Security benefits. Social Security benefit receipt removes 19 percent of pretransfer very poor persons with substantial functional limitations from poverty, and moves an additional 23 percent into the moderately poor group. The combination of Social Security and other non-means-tested transfers reduces the proportion in poverty by 8 percentage points (from 81 to 73 percent). SSI combined with Social Security and non-means-tested transfers raises 31 percent of the individuals with substantial functional limitations above half the poverty line and an additional 33 percent out of poverty. The addition of AFDC raises both estimates to 35 percent, while other cash income has only a marginal impact on the figures.37 Food stamps combined with benefits from the other programs moves 44 percent of the very poor group above half the poverty line, and reduces the proportion in poverty by an additional 38 percent.

The impact of all these programs on individuals with substantial functional limitations was more significant than the impact on the total population in the lowest income class (see Table VII.2). Among the total population, these programs combined reduced the proportion below half the poverty line by 68 percent (versus 82 percent)'and the proportion in poverty by 26 percent (versus 38 percent). The incremental effects of Social Security and SSI were more extreme on the population with a substantial functional limitation than on the total population.

2. Moderately Poor, Based on Pretransfer Income

The combination of federal cash assistance programs and food stamps reduces the number in poverty by two-thirds among persons with substantial functional limitations in the second lowest pretransfer income class. More than two-fifths (43 percent) have post-food stamp income above 150 percent of poverty. However, one-third remain below poverty even after receiving the combination of all cash income and food stamps.

Social Security has the largest impact for persons with a substantial limitation in this moderately poor pretransfer income class, reducing the proportion below poverty by half. The incomes of more than one-third (34 percent) of the individuals were boosted above 150 percent of poverty by Social Security benefits, while 16 percent are between 101 and 150 percent of poverty based on their post-Social Security income. Approximately equal incremental impacts are observed for the other programs: an additional 5 percent are lifted out of poverty from the receipt of other cash benefits, an additional 4 percent from SSI, an additional 3 percent from AFDC and other cash welfare, and an additional 4 percent from food stamps. Moreover, the additional impact of each of these programs on the number of individuals in households whose post-transfer income exceeds 150 percent of poverty is 3 percent or less of the total population.

These programs in total and Social Security in particular have less of an impact on the total population who are in moderately poor pretransfer income households than they do on persons with substantial functional limitations with comparable pretransfer incomes. More than half (57 percent) of the total population remains in poverty after the inclusion of all cash income and food stamps (Table VII.2), compared with 33 percent of those with substantial functional limitation (Table VII.1). Furthermore, Social Security moves only 25 percent of the individuals out of poverty (versus 50 percent).

It should be noted that these estimates do not imply that the proportion of persons with substantial limitations in functioning below poverty is less than the proportion of the total population below poverty. Mathematica Policy Research (1989) points out that 24 percent of those with substantial limitations in functioning are in households whose monthly income falls below poverty compared to 12 percent of the total population.

3. Other Pretransfer Poverty Classes

These programs have a smaller impact on persons with substantial functional limitations whose pretransfer incomes are above poverty than on persons with substantial functional limitations in poverty. About half (53 percent) of the near-poor population are lifted out of that income class from receiving federal cash assistance and food stamps. About one in 10 (11 percent) of the near-poor achieve a moderate standard of living (i.e, post-transfer income that exceeds 250 percent of poverty), due again primarily to Social Security benefits. Similarly, 30 percent of the below-moderate income group achieve a moderate standard of living from receiving federal assistance program benefits, primarily Social Security.

Persons with substantial functional limitations whose income exceeds 150 percent of poverty are more beneficially affected by these programs than the total population in the higher income classes. Proportionately fewer of the total population are moved to a higher income classes as a result of federal assistance programs than the population with substantial functional limitations.

TABLE VII.3: The Impact of Transfer Payments on the Economic Well-Being of Persons Ages 65 and Older with Substantial Functional Limitations

Pretransfer Income Classification

Total (thousands)

Post-Transfer Poverty Ratio*

Total

0-50%

51-100%

Subtotal BelowPoverty

101-150%

151-250%

251% and Higher

Subtotal AbovePoverty

Very Poor: Pretransfer Income 0-50% of Poverty

5,601

Pretransfer + Social Security

100.0%

13.3%

33.0%

46.3%

34.6%

18.2%

0.9%^^

53.7%

Pretransfer + nonmeans-tested transfers

100.0

9.2

30.0

39.2

35.7

22.6

2.5

60.8

Pretransfer + nonmeans-tested transfers + SSI

100.0

2.9

31.7

34.6

38.7

23.9

2.8

65.4

All Cash Income

100.0

2.1

31.4

33.5

39.7

24.0

2.8

66.5

All Cash Income + food stamps

100.0

1.6

30.3

31.9

40.9

24.4

2.8

68.1

Moderaterly Poor: Pretransfer 51-100% of Poverty

1,797

Pretransfer + Social Security

100.0

---

4.4^^

4.4^^

15.0

63.1

17.5

95.6

Pretransfer + nonmeans-tested transfers

100.0

---

3.4^^

3.4^^

13.7

62.0

20.9

96.6

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

2.2^^

2.2^^

13.2

63.7

20.9

97.8

All Cash Income

100.0

---

2.2^^

2.2^^

13.2

63.7

20.9

97.8

All Cash Income + food stamps

100.0

---

1.9^^

1.9^^

13.3

63.9

20.9

98.1

Near Poor: Pretransfer 101-150% of Poverty

1,055

Pretransfer + Social Security

100.0

---

---

---

9.4

54.0

36.7

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

8.0

51.8

40.2

100.0

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

---

---

6.0^^

53.8

40.2

100.0

All Cash Income

100.0

---

---

---

6.0^^

53.8

40.2

100.0

All Cash Income + food stamps

100.0

---

---

---

6.0^^

53.8

40.2

100.0

Below-Moderate Income: Pretransfer 151-250% of Poverty

1,389

Pretransfer + Social Security

100.0

---

---

---

---

24.7

75.3

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

---

23.3

76.7

100.0

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

---

---

---

20.9

79.1

100.0

All Cash Income

100.0

---

---

---

---

20.9

79.1

100.0

All Cash Income + food stamps

100.0

---

---

---

---

20.5

79.5

100.0

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. --- Not Applicable * Computed as the ratio of pretransfer household income plus the transfer payments listed for each row divided by the monthly poverty level. ^^ Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

TABLE VII.4: The Impact of Transfer Payments on the Economic Well-Being of All Persons Ages 65 and Older

Pretransfer Income Classification

Total (thousands)

Post-Transfer Poverty Ratio*

Total

0-50%

51-100%

Subtotal BelowPoverty

101-150%

151-250%

251% and Higher

Subtotal AbovePoverty

Very Poor: Pretransfer Income 0-50% of Poverty

9,996

Pretransfer + Social Security

100.0%

11.9%

28.1%

40.0%

34.5%

24.4%

1.0%

60.0%

Pretransfer + nonmeans-tested transfers

100.0

7.9

25.4

33.3

35.4

28.4

2.8

66.7

Pretransfer + nonmeans-tested transfers + SSI

100.0

3.1

26.6

29.7

37.8

29.5

3.0

70.3

All Cash Income

100.0

2.4

26.6

29.1

38.3

29.6

3.0

70.9

All Cash Income + food stamps

100.0

2.2

25.6

27.8

39.4

29.8

3.0

72.2

Moderaterly Poor: Pretransfer 51-100% of Poverty

4,236

Pretransfer + Social Security

100.0

---

3.5

3.5

10.0

66.3

20.2

96.5

Pretransfer + nonmeans-tested transfers

100.0

---

2.8

2.8

9.0

64.7

23.6

97.2

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

2.1

2.1

8.6

65.7

23.6

97.9

All Cash Income

100.0

---

2.0^^

2.0^^

8.7

65.7

23.6

98.0

All Cash Income + food stamps

100.0

---

1.8^^

1.8^^

8.8

65.7

23.6

98.2

Near Poor: Pretransfer 101-150% of Poverty

2,729

Pretransfer + Social Security

100.0

---

---

---

6.2

43.2

50.5

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

5.5

42.3

52.2

100.0

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

---

---

4.6

42.7

52.8

100.0

All Cash Income

100.0

---

---

---

4.6

42.7

52.8

100.0

All Cash Income + food stamps

100.0

---

---

---

4.6

42.7

52.8

100.0

Below-Moderate Income: Pretransfer 151-250% of Poverty

3,727

Pretransfer + Social Security

100.0

---

---

---

---

17.8

82.2

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

---

16.7

83.3

100.0

Pretransfer + nonmeans-tested transfers + SSI

100.0

---

---

---

---

15.4

84.6

100.0

All Cash Income

100.0

---

---

---

---

15.3

84.7

100.0

All Cash Income + food stamps

100.0

---

---

---

---

15.1

84.9

100.0

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. --- Not Applicable * Computed as the ratio of pretransfer household income plus the transfer payments listed for each row divided by the monthly poverty level. ^^ Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

B. ELDERLY

As with the working-age population we have arrayed the elderly population by a pretransfer income to poverty ratio and a series of post-transfer poverty ratios (see Table VII.3 and Table VII.4). The post-transfer poverty ratios are computed by incrementing pretransfer household income by benefits from one program at a time in the following sequence: Social Security, other non-means-tested transfers, SSI, other cash transfers, and food stamps. We subdivide the discussion according to the pretransfer poverty class.

1. Very Poor, Based on Pretransfer Income

Among the very poor elderly with substantial functional limitations, Social Security plays significant role in alleviating poverty. Over half (54 percent) of those in households whose pretransfer income is below half of the poverty line are raised above the poverty line from receiving Social Security (see Table VII.3). The combination of federal government transfers and food stamps leaves almost no individuals in this lowest income class (2 percent remain very poor after all cash income and food stamps are counted). However, 32 percent still have income below the poverty level even after the receipt of federal assistance.

The second largest incremental effect (after Social Security) arm from the addition of other non-means-tested cash income, which raises the proportion above poverty by an additional 7 percentage points (from 54 to 61 percent); other cash benefit receipt moves an additional 4 percent of the very poor persons above poverty.

Means-tested transfers have only a small incremental effect on elderly individuals in the lowest pretransfer income class. SSI reduces the proportion who remain in this income class by 7 percent, but reduces the proportion in poverty only by 5 percent. Other cash income and food stamps combined reduces the number in poverty by 3 percent.

It is interesting to note that these federal assistance benefits are somewhat more successful at alleviating poverty among the total population than they are at alleviating poverty among elderly persons with substantial functional limitations. Among the total population, 60 percent of the very poor (versus 54 percent) are lifted out of poverty from receiving Social Security benefits (Table VII.4). This may be due to lower wage rates received during the pre-retirement years as a result of the functional limitation. The cumulative affect of all programs on the total population is a reduction in the number in poverty by 72 percent (compared with 68 percent among those with substantial functional limitations).

2. Other Pretransfer Poverty Classes

Social Security benefits also play a significant role in alleviating poverty among the moderately poor and higher income classes. Almost all of the moderately poor with substantial functional limitations and almost all of the total population of moderately poor have post-Social Security income above poverty. In fact, 18 percent of those with substantial functional limitations and 20 percent of the total population of moderately poor persons are lifted to the highest income class.

Ninety-one percent of near-poor elderly persons with substantial functional limitations and 94 percent of the total population of near-poor elderly have post-Social Security income above 150 percent of poverty. Among the total population, half achieve a moderate standard of living from receiving Social Security benefits, which is larger than the impact on those with substantial functional limitations (37 percent). Non-means-tested transfers and, surprisingly, SSI have a minimal impact on the poverty status of the population of near-poor elderly. The effects of SSI are likely to be in the few states whose combine federal and state SSI maximum payments exceed the poverty threshold.

Most elderly in the below-moderate income group have income above 250 percent of poverty after the receipt of federal cash assistance and food stamps. The impact is larger among the total population (85 percent) than among those with substantial functional limitations (80 percent), but the difference is not significant

C. CHILDREN

Children are arrayed by household pretransfer income to poverty ratio and a series of post-transfer income to poverty ratios (see Table VII.5 and Table VII.6). The post-transfer ratios have as their numerators pretransfer income plus benefits from the following programs added in sequence: Social Security, other non-means-tested transfers, AFDC, other cash welfare, and food stamps. Children are subdivided according to the pretransfer income to poverty ratio.

1. Very Poor, Based on Pretransfer Income

Federal assistance is not nearly as effective at alleviating poverty among children younger than age 18 with disabilities as it is among the elderly or among working-age persons with substantial functional limitations. Eighty-one percent of children with disabilities whose pretransfer household income falls below half the poverty fine remain in poverty after the receipt of the major federal assistance programs. Federal assistance effects some movement between the two lowest income classes, but it is simply not sufficient to alleviate poverty among this group. After the receipt of Social Security, other cash benefits, and AFDC, 50 percent of those with the lowest pretransfer income remain in that class. The most significant effect on the movement between the two income classes is attributed to AFDC. When food stamps are counted as income, a large proportion of additional children (almost one-fourth) are lifted out of the lowest income class. Nonetheless, one out of four children with disabilities in the lowest income class remains below half the poverty line after the receipt of all federal assistance.

TABLE VII.5: The Impact of Transfer Payments on the Economic Well-Being of Persons Younger Than Age 18 with Disabilities

Pretransfer Income Classification

Total (thousands)

Post-Transfer Poverty Ratio*

Total

0-50%

51-100%

Subtotal BelowPoverty

101-150%

151-250%

251% and Higher

Subtotal AbovePoverty

Very Poor: Pretransfer Income 0-50% of Poverty

594

Pretransfer + Social Security

100.0%

85.3%

9.3%^^

94..6%

4.7%^^

0.7%^^

---

5.4%^^

Pretransfer + nonmeans-tested transfers

100.0

78.3

10.3^^

88.6

7.5^^

3.9^^

---

11.4^^

Pretransfer + nonmeans-tested transfers + AFDC

100.0

49.7

35.4

85.1

10.0^^

3.1^^

1.7%^^

14.9

All Cash Income

100.0

47.6

37.5

85.1

10.0^^

3.1^^

1.7^^

14.9

All Cash Income + food stamps

100.0

23.5

57.8

81.3

13.8

3.1^^

1.7^^

18.7

Moderaterly Poor: Pretransfer 51-100% of Poverty

199

Pretransfer + Social Security

100.0

---

79.1

79.1

13.6^^

7.3^^

---

20.9^^

Pretransfer + nonmeans-tested transfers

100.0

---

70.5

70.5

18.4^^

11.0^^

---

29.5^^

Pretransfer + nonmeans-tested transfers + AFDC

100.0

---

61.3

61.3

25.7^^

13.0^^

---

38.7

All Cash Income

100.0

---

61.3

61.3

25.7^^

13.0^^

---

38.7

All Cash Income + food stamps

100.0

---

57.0

57.0

30.0^^

13.0^^

---

43.0

Near Poor: Pretransfer 101-150% of Poverty

290

Pretransfer + Social Security

100.0

---

---

---

89.2

9.8^^

1.0^^

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

83.6

14.3^^

2.1^^

100.0

Pretransfer + nonmeans-tested transfers + AFDC

100.0

---

---

---

70.6

27.3

2.1^^

100.0

All Cash Income

100.0

---

---

---

70.6

27.3

2.1^^

100.0

All Cash Income + food stamps

100.0

---

---

---

69.8

28.1

2.1^^

100.0

Below-Moderate Income: Pretransfer 151-250% of Poverty

543

Pretransfer + Social Security

100.0

---

---

---

---

91.0

9.0^^

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

---

89.7

10.3^^

100.0

Pretransfer + nonmeans-tested transfers + AFDC

100.0

---

---

---

---

88.8

11.2^^

100.0

All Cash Income

100.0

---

---

---

---

88.8

11.2^^

100.0

All Cash Income + food stamps

100.0

---

---

---

---

88.5

11.5^^

100.0

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. --- Not Applicable * Computed as the ratio of pretransfer household income plus the transfer payments listed for each row divided by the monthly poverty level. ^^ Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

TABLE VII.6: The Impact of Transfer Payments on the Economic Well-Being of Persons Younger Than Age 18

Pretransfer Income Classification

Total (thousands)

Post-Transfer Poverty Ratio*

Total

0-50%

51-100%

Subtotal BelowPoverty

101-150%

151-250%

251% and Higher

Subtotal AbovePoverty

Very Poor: Pretransfer Income 0-50% of Poverty

10,343

Pretransfer + Social Security

100.0%

88.6%

6.4%

95.0%

3.2%

1.8%

---

5.0%

Pretransfer + nonmeans-tested transfers

100.0

81.4

10.2

91.6

5.7

2.5

0.1%^^

8.4

Pretransfer + nonmeans-tested transfers + AFDC

100.0

56.3

32.6

88.9

8.1

2.7

0.3^^

11.1

All Cash Income

100.0

56.5

35.3

88.8

8.2

2.7

0.3^^

11.2

All Cash Income + food stamps

100.0

26.7

58.2

84.9

11.9

2.9

0.3^^

15.1

Moderaterly Poor: Pretransfer 51-100% of Poverty

5,310

Pretransfer + Social Security

100.0

---

89.6

89.6

6.1

4.2

0.1^^

10.4

Pretransfer + nonmeans-tested transfers

100.0

---

82.7

82.7

10.6

6.3

0.4^^

17.3

Pretransfer + nonmeans-tested transfers + AFDC

100.0

---

75.8

75.8

16.8

7.0

0.4^^

24.2

All Cash Income

100.0

---

75.5

75.5

16.8

7.4

0.4^^

24.5

All Cash Income + food stamps

100.0

---

68.0

68.0

23.8

7.8

0.4^^

32.0

Near Poor: Pretransfer 101-150% of Poverty

7,333

Pretransfer + Social Security

100.0

---

---

---

92.3

6.9

0.8^^

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

86.8

11.8

1.4

100.0

Pretransfer + nonmeans-tested transfers + AFDC

100.0

---

---

---

84.1

14.5

1.4

100.0

All Cash Income

100.0

---

---

---

83.6

15.0

1.4

100.0

All Cash Income + food stamps

100.0

---

---

---

82.8

15.8

1.4

100.0

Below-Moderate Income: Pretransfer 151-250% of Poverty

15,682

Pretransfer + Social Security

100.0

---

---

---

---

96.9

3.1

100.0

Pretransfer + nonmeans-tested transfers

100.0

---

---

---

---

95.4

4.6

100.0

Pretransfer + nonmeans-tested transfers + AFDC

100.0

---

---

---

---

94.6

5.4

100.0

All Cash Income

100.0

---

---

---

---

94.5

5.5

100.0

All Cash Income + food stamps

100.0

---

---

---

---

94.4

5.6

100.0

SOURCE: Wave 3 of the 1984 SIPP Panel supplemented with data from Waves 1, 2, and 4. --- Not Applicable * Computed as the ratio of pretransfer household income plus the transfer payments listed for each row divided by the monthly poverty level. ^^ Indicates that the standard error of the estimate exceeds 30 percent of the estimate.

The assistance programs appear to be less effective for all children in the lowest pretransfer income class than for children with disabilities, but the difference is not significant (Table VII.6). Eighty-five percent of the total population of children remain in poverty after the receipt of federal cash assistance and food stamps, compared with 81 percent of very poor children with disabilities. Social Security has about the same initial impact (95 percent remain below poverty), while other means-tested transfers have a marginally lower incremental impact (lifting about 3 percentage points fewer out of poverty among the total population of children than among those with disabilities). Similarly, the proportion who remain in the lowest income class does not differ significantly between the total population with children and children with disabilities.

2. Other Pretransfer Poverty Classes

Even among moderately poor children with disabilities, the federal assistance programs combined do not effectively eliminate poverty. They succeed in moving only 43 percent of moderately poor children with disabilities out of poverty. Thus, over half remain poor. Furthermore, the anti-poverty effectiveness of the federal assistance programs does not differ significantly among the total population of children in the second pretransfer income class than it does from among children with disabilities in this income class. Just over two-thirds (68 percent) of the total population of children remain in poverty after the receipt of benefits from for all of these programs (including food stamps), compared with 57 percent of children with disabilities.

For children in the higher income classes, federal cash assistance and food stamps have relatively little impact, although the effect is stronger among children with disabilities than among the total population children. Thirty percent of near-poor children with disabilities and 17 percent of the total population of near-poor children have post-food stamp income above 150 percent of poverty. AFDC benefits have the largest incremental impact among near-poor children with disabilities while Social Security has the largest impact among total near poor children.

Allin, Susan, and Pat Doyle. Analysis of the Quality of SIPP as It Pertains to the Food Stamp Program. Draft report to the U.S. Department of Agriculture, Food and Nutrition Service. Washington, D.C.: Mathematica Policy Research, Inc., 1989.

Bartolomei-Hill, Steve. Who, Why, and How: Estimates of Participation in the SSI Program. Draft report. Washington, D.C.: U.S. Department of Health and Human Services, June 1989.

Bye, Barry V., and Salvatore J. Gallicchio. A Note on Sampling Variance Estimates for Social Security Program Participants From the Survey of Income and Program Participation. Social Security Bulletin, vol. 51, no. 10, October 1988, pp. 4-21.

Committee on Ways and Means, U.S. House of Representatives. Background Material and Data on Programs within the Jurisdiction of the Committee on Ways and Means: 1988 Edition. WMCP: 100-29. Washington, D.C.: U.S. Government Printing Office, 1988.

Czajka, John L. Digest of Data on Persons with Disabilities. Washington, D.C.: The National Institute of Handicapped Research, Office of Special Education and Rehabilitative Services, U.S. Department of Education, 1984.

Doyle, Pat, and Robert Dalrymple. The Impact of Imputation Procedures on Distributional Characteristics of the Low Income Population. Third Annual Research Conference Proceedings. Washington, D.C.: Bureau of the Census, U.S. Department of Commerce, 1987.

LaPlante, Mitchell P. Data on Disability from the National Health Interview Survey, 1983-1985, An InfoUse Report. Washington, D.C.: U.S. National Institute on Disability and Rehabilitation Research, 1988.

Leavitt, Thomas D., and James H. Schulz. The Role of the Asset Test in Program Eligibility and Participation: The Case of SSI. Washington, D.C.: American Association of Retired Persons, 1988.

Social Security Administration. Program and Demographic Characteristics of Supplemental Security Income Beneficiaries, December: 1984. Washington, D.C.: Office of Policy, Social Security Administration, U.S. Department of Health and Human Services, 1986.

U.S. Bureau of the Census. Survey of Income and Program Participation, Users Guide. Washington, D.C.: U.S. Department of Commerce, July 1987.

U.S. Bureau of the Census. Disability, Functional Limitation, and Health Insurance Coverage: 1984/85. Current Population Reports, Series P-70, no. 8. Washington, D.C.: U.S. Government Printing Office, 1986.

U.S. Bureau of the Census. Economic Characteristics of Households in the United States: Third Quarter 1984. Current Population Reports, P-70, no 5. Washington, D.C.: U.S. Government Printing Office, 1985a.

U.S. Bureau of the Census. Estimates of Poverty Including the Value of Noncash Benefits: 1984. Technical Paper no. 55. Washington, D.C.: U.S. Government Printing Office, 1985b.

U.S. Department of Agriculture, Food and Nutrition Service, Office of Public Information. Food Stamp Program Statistical Summary of Operations: Public Information Data Base, 1988. Alexandria, VA: Food and Nutrition Service, U.S. Department of Agriculture, 1989.

U.S. Department of Agriculture. Characteristics of Food Stamp Households, August 1984. Washington, D.C.: Food and Nutrition Service, U.S. Department of Agriculture, 1987.

Vaughan, Denton R. Development and Evaluation of a Survey-Based Type of Benefit Classification for the Social Security Program. Social Security Bulletin, vol. 52, no. 1, January 1989, pp. 12-26.

For further information on the design and scope of SIPP, see U.S. Bureau of the Census (1987).

The questions on health and disability in SIPP are presented in Appendix A of Mathematica Policy Research (1989).

We found high correlations among questions about limitations in functioning, thus making it unclear whether or not we should actually count them separately when we determined the number of difficulties for Level III and Level IV. Nonetheless, we decided to follow conventional practice and ignore the correlations; thus, the classification treats reported difficulties with each of the seven sensory and physical functions as independent.

For children ages 16 and 17, SIPP provides information on limitations in functioning comparable to that collected for adults. We elected not to use this information, opting instead to define disability consistently for all children younger than age 18.

For example, see LaPlante (1988); Czajka (1984); or Lando, Cutler, and Gamber (1982).

For a discussion of the disability criteria, refer to Burwell, Preston, and Bailey (1989).

Administrative data on the number of disabled SSI participants younger than age 65 were derived from the Social Security Bulletin (July, 1989). Persons younger than age 18 and persons in institutions were subtracted from this figure. SSI participants younger than age 18 were estimated at 9.4 percent and persons in institutions were estimated at 5.5 percent from Social Security Administration (1984).

The administrative statistics on Medicare enrollment were not adjusted to conform to the SIPP universe.

For a more complete discussion of sampling and nonsampling error in SIPP, see U.S. Bureau of Census (1987) and references noted therein.

Formulas for approximating standard errors and making statistical tests are presented in "User's Guide" to SIPP produced by the U.S. Bureau of the Census (1987) and by Bye and Gallicchio (1988).

There is some overlap between the statistics reported in this chapter and those reported in U.S. Bureau of the Census (1986), but it is not extensive because we have used the expanded definitions of disability developed in Mathematica Policy Research (1989). In some instances where the measure is the same, the estimates presented in U.S. Bureau of the Census and those presented herein differ only in minor ways, due primarily to the use of different weights and reference periods.

U.S. Bureau of the Census (1986) found similar estimates, but they are not directly comparable due to methodological differences. That report notes that 73 percent of SSI participants ages 15 to 64 had at least some limitation in functioning, and that 43 percent had an inability to perform one or more functions. It is also noteworthy that 88 percent of persons ages 15 to 64 who were covered under Medicare had at least some limitation in functioning, and that 58 percent had an inability to perform at least one function. The Census Bureau estimates for Social Security participants were not subdivided according to program disability status and thus cannot be compared with the estimates presented here.

Mathematica Policy Research (1989) discusses the validity of self-reported disability information similar to that which is collected in SIPP.

It should be noted, however, that the AFDC program does not classify parents as incapacitated unless they do not qualify as single parents.

The low-income population consists of persons in households whose monthly income falls below 150 percent of the monthly poverty level (one-twelfth of the annual poverty line adjusted for inflation).

The latter estimate (41 percent of elderly Social Security and Medicare participants have no limitations in functioning) is consistent with U.S. Bureau of the Census (1986), who reports that 59 percent of elderly Social Security and Medicare participants have at least some limitation in functioning.

U.S. Bureau of the Census (1986) reports that 84 percent of elderly SSI participants, 86 percent of elderly food stamp participants, and 84 percent of elderly Medicaid participants have at least some limitation in functioning. The corresponding numbers from Table III.2 are 83 percent, 86 percent, and 83 percent.

To conserve space, we have not presented unique combinations of all multiple program combinations. For example, persons who participate in Social Security are arrayed by whether or not they receive food stamps and by whether or not they receive other in-kind benefits. Persons who receive Social Security along with both food stamps and other in-kind benefits (such as housing assistance) appear in two rows of the table (Social Security and food stamps, and Social Security and in-kind).

The number of persons with substantial functional limitations in low-income households is 4.4 million computed from Table III.1.

The number of persons prevented from work in low-income households is 3.7 million computed from Table III.1.

Refer to Appendix A for detailed information on the residual benefits categories.

Nine percent of the total population (or 13.3 million) are in low-income households and do not receive assistance from the federal assistance programs. This is 47 percent of the total number of low-income working age adults.

Social security benefits are not divided according to benefit type for the elderly as they were for the working-age population. It should be noted that, in this section, other cash welfare includes any AFDC payments that the elderly guardians of young children may report.

Housing and energy assistance are the most prevalent of the other in-kind benefits received by the elderly (see Appendix A).

Individuals ages 18 to 64 who report both Social Security and Medicare in SIPP were usually classified as receiving SSDI benefits in the analysis file developed for this report. However, some individuals were not classified as SSDI beneficiaries in April because information obtained in interviews conducted before and after the one yielding data for April suggested they were not SSDI beneficiaries.

Although it is thought that the editing procedures used by the Census Bureau to develop the public-use SIPP files may be responsible for the estimated universal Medicaid coverage among SSI participants, the Census Bureau says that such an edit was not performed.

For example, Weinberg (1986) reports that among families containing an elderly individual, 97 percent have Medicare either singly or in combination with another program.

SIPP administers a question designed to measure participation in state-administered plans but the information is suppressed on the publicly available data files so as not to violate disclosure rules.

This procedure was invoked in order to be consistent with reported benefits on the SIPP file, which do not include state-administered payments.

In the April 1984 SIPP-based analysis file, 224,000, or 13 percent, of the total number of persons ages 18 to 64 who reported participation in SSI and 257,000, or 14 percent, of persons age 65 and older who reported participation in SSI appear to be ineligible due to high income or assets. These estimates are comparable to the proportion of food stamp households simulated to be ineligible for food stamps (11 percent, as estimated by Allin and Doyle, 1989). However, they are larger than estimates of seemingly ineligible SSI participants from Drazga et al. (1982)--4 percent.

For example, Warlick (1982) estimates a participation rule of 50 percent among eligible elderly individuals based on the March 1975 Current Population Survey. Coe (1985) found a corresponding rate of 52 percent based on the 1979 Michigan Panel Study of Income Dynamics.

Based on Mathematica Policy research (1989), the distribution of persons prevented from working by the severity of the limitation in functioning is as follows: 11 percent are Level I (the most severe limitation--needs assistance with ADLs), 17 percent are Level II, 23 percent are Level III, 19 percent are Level IV, 12 percent are Level V, and 18 percent are Level VI (no limitation in functioning). The corresponding distribution of SSI-eligibles is similar: 10 percent are Level I, 15 percent are Level II, 18 percent are Level III, 19 percent are Level IV, 14 percent are Level V, and 23 percent are Level VI.

Three methods for valuing food stamp benefits have been used in the literature: the market (or face) value of the coupons; the cash-equivalent value, reflecting the recipients' perceived value of the benefit; and the poverty-budget share, or the minimum of the market value of food stamps and one-third of the poverty level less benefits received under the school lunch and breakfast programs. U.S. Bureau of the Census (1985b) contains a more detailed explanation of these alternatives. The market value approach is used in this study. This choice was for convenience and does not reflect a belief that this approach is better or worse than the other alternatives.

We use the official poverty threshold appropriate for measuring poverty status based on cash income, even though that measure does not take into account in-kind transfers. Again, we use this measure for convenience, and its use does not reflect an opinion that it is the most appropriate given the inclusion of food stamps in this analysis.

Weinberg (1987) showed that cash transfers reduced the poverty rate among families by 44 percent. When aggregated over the tables computed in this chapter, we show 42 percent reduction in the poverty rate of individuals as the result of the receipt of cash transfers.

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